SEC Proposes CEO Pay Ratio Disclosure

Publicly traded companies are already required to disclose how much they pay their top executives. Now they may have to make an extra calculation and tell the public how the CEO’s salary compares with that of average workers. The Securities and Exchange Commission voted 3 to 2 on Wednesday to propose a requirement that public companies disclose the ratio of CEO compensation to worker pay. The move, long a favorite shaming tactic of labor activists, is opposed by business lobbies. They say the disclosures are meaningless to investors and just add to already burdensome requirements. The proposal stems from an amendment written by Senator Robert Menendez in the Dodd-Frank overhaul of the financial regulatory system.