Disclosed: The Pay Gap Between CEOs and Employees
Nearly three years after Congress ordered public companies to reveal their chief executive officer-to-worker pay ratios under the Dodd-Frank law, the numbers still aren’t public. The provision was included to deter excessive compensation schemes that, in the words of U.S. Senator Robert Menendez (D-N.J.), “were part of the fuel that led to the financial collapse.” Since then, the requirement has been parked at the Securities and Exchange Commission, which must develop a rule on how to calculate and report the ratio. Questions remain: Do companies have to determine their median employee compensation by an actual count or would statistical sampling suffice? How should global companies reconcile differences in wages and benefits from one country to the next? For that matter, how should investors interpret differences in compensation across industries?
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