, Columnist
CEO Pay Is an Underrated Risk to Stocks
If companies don’t fix wage inequality, somebody’s going to do it for them.
Photographer: Justin Sullivan/Getty Images
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As U.S. stock investors contemplate the biggest long-term risks facing the market, such as a global economic slowdown, trade tensions or rich equity prices, they shouldn’t overlook a critical one: the pay disparity between corporate bosses and workers.
In 2015, the Securities and Exchange Commission adopted a rule that required public companies to disclose the median compensation of employees and that of the CEO, beginning with fiscal year 2017. The numbers have confirmed what many suspected: Chief executives are paid tremendously more than workers.