Enforce law on CEO pay reporting

  • Article by: New York Times Editorial
  • Updated: September 25, 2013 - 9:44 PM

Of all the provisions in the vast and complex Dodd-Frank financial reform law, one of the most far-reaching is also the most direct and easily understood. It requires public companies to compute and disclose the ratio of a chief executive’s pay to that of a typical employee.

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pumiceSep. 25, 13 9:12 PM

From the article: "The information [on CEO pay relative to typical employee pay] is vital. It would allow investors to more accurately judge the effect of pay structures on company performance. It would inform investors’ votes on executive pay, because it would be a benchmark for determining whether executive pay is excessive. It would help regulators and policymakers detect bubbles and impending crashes, because those often correlate to widening pay gaps. It would help alert consumers and taxpayers to companies where workforces are underpaid, even as executive pay soars, a circumstance that often requires taxpayer dollars be spent on assistance to low-wage workers." Count us as vindicated.

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elle2008Sep. 26, 13 8:22 AM

Why on earth would they want to do that? I think our leaders need to take a look at the pay at Walmart. The American people are subsidizing that Company and as someone who will not step foot in that store, we need to do something about that.

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dschachenmeyerSep. 26, 13 3:49 PM

What exactly is the goal here of forcing companies to publicly disclose this information? The article claims "It would inform investors’ votes on executive pay, because it would be a benchmark for determining whether executive pay is excessive", but the ratio of executive pay to average worker pay is not a good benchmark for investors. A better one would be for investors to compare the pay of a CEO of one company to the pay of a CEO in a competing company. How about the claim, " It would help regulators and policymakers detect bubbles and impending crashes." How exactly would it do this? There's never been a proven correlation between CEO pay and market crashes. Even if there was, regulators already have access to the confidential corporate books so there is no need to force a company to make the information public. Then there is, "It would help alert consumers and taxpayers to companies where workforces are underpaid, even as executive pay soars, a circumstance that often requires taxpayer dollars be spent on assistance to low-wage workers.". Ah, now we see the real reason. Who determines when someone is "underpaid" and how do they determine it? Who exactly gets to determine the "proper" ratio for executive pay to staff pay and what makes them experts? This is nothing but a ploy to push artificial government caps on executive pay or increases in the minimum wage.

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