Skip to content
Michelle Leder

The CEO Pay Ratio Rule Is a Failed Experiment

The SEC should scrap the disclosure requirement and focus on matters more relevant to investors.

Working but not counted.

Working but not counted.

Photographer: Paul Frangipane/Bloomberg

Back in 2017, a new rule aimed at exposing the excesses of corporate America went into effect: Every year, most publicly traded companies would have to disclose a CEO pay ratio, comparing the compensation of the chief executive to that of the median employee.

Having spent the subsequent five years trying to make sense of these disclosures, I think it’s time to call the rule a failed experiment and scrap it.