Skip to comments.[New SEC Rule] Companies will be required to reveal CEOs’ versus workers’ pay
Posted on 08/06/2015 3:39:04 AM PDT by markomalley
The chief executive of General Electric raked in a $37.3 million pay package last year, a large sum by any standard.
But how much larger was it than the average pay of the 305,000 employees who helped General Electric earn billions in profits that year? The industrial giant did not disclose that comparison, and corporate America rarely reveals how the compensation of the chief executive stacks up against that of the workers in the ranks below.
That will soon change.
After a long delay and plenty of pushback from corporations, the Securities and Exchange Commission approved in 3-2 vote on Wednesday a rule that would require most public companies to regularly reveal the ratio of the chief executives pay to that of the average employee.
Representatives of corporations were quick to assail the new rule, which will start to take effect in 2017, saying that it was misleading, costly to put into practice and intended to shame companies into paying executives less.
But the ratio, cropping up every year in audited financial statements, could stoke and perhaps even inform a debate over income inequality that has intensified in recent years as the wages of top earners have grown far more quickly than anyone elses.
(Excerpt) Read more at bendbulletin.com ...
What possible use would this metric track or compare that would be of any real use to the market?
CEOs are NOT like elite athletes, and are much, much more interchangeable than is sold to us by those who benefit from keeping CEO salaries so high. Many work very long hours and have little family time, and deserve compensation for that, for sure. That said, it's the companies business what they pay their CEOs, but investors have a right to know those salaries as part of the investor's assessment of overall management.
"Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other." John Adams
[Since this is an SEC rule, we are talking about public companies only]
You are correct, but that should be a matter for the board of directors to deal with in the manner of their choosing...and the BOD work for the investors.
This should in no way be a matter of public regulators to manage.
Likely none,the free market didnt need it before and doesnt now. Instead with the help of the msm this will only help to push the income ‘inequality’ narrative.
I agree that what the high salaries some of the CEO are obscene however -
this SEC rule is equally obscene and patently un-American. This is a proudly a capitalistic country. Capitalism is the reason we enjoy the good life - even when suffering under a socialistic administration, or in spite of it.
Hate to tell you but this is going to be wildly popular amongst the great unwashed out there. Democrats will be using it to fuel their campaigns for years to come.
America, it seems, has finally embraced the Tall Poppy Syndrome.
The numbers sound sensational and inflammatory, but here are the facts:
If the CEO had given up his entire salary to distribute to all his employees, their salary would have increased by $122 per year, or about $10 each per month.
Is an effective CEO worth a large salary? My vote says yes.
When will they go after pro athletes or G-d forbid, politicians who come into office and then leave worth millions.
Thanks markomalley, and exactly, this is all about "income disparity", redistribution, "you didn't build that", white privilege, etc etc.
I reiterate my opinion that CEOs are much more interchangeable than the public has been led to believe, and that enormous CEO salaries that are not performance linked are a bad business model. CEO salaries have increased dramatically (7-9 fold) in the past ~40 years, and unless I'm missing something this does not seem to have led to a great surge in American corporate success.
That said, I also reiterate that I despise socialism/communism, and attempts of government to ‘engineer’ equality of outcome.
It’ll be easy for the Party of the Single Party State to sell gubmint re-engineering, redistribution, confiscation of property (starting with guns of course), and “economic justice” thanks to fuzzy thinking and yeah-buts of that kind.
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