In a victory for corporate disclosure, the Securities and Exchange Commission (SEC) recently completed the CEO pay ratio rule required under the five-year-old Dodd-Frank financial law. The provision will require that companies reveal the pay gap between top executives and rank-and-file workers.
Companies for years have fought the SEC’s implementation of the rule. But the agency rightfully implemented language that largely sides with the intent spelled out under Dodd-Frank. The Teamsters applaud the SEC efforts and say it will shine sunlight on the workings of corporations across the country.
“At a time when corporate profits are near an all-time high and income inequality is growing, employees and shareholders have a right to know whether companies are padding the wallets of executives at the cost of workers and the company’s bottom line,” said Ken Hall, General Secretary-Treasurer. “It’s time we learn from the past failings that helped cause the Great Recession.”
Under the new rule, companies will have to disclose median worker pay and compare it to CEO compensation. According to studies, the average CEO earned 373 times more than the typical U.S. worker in 2014. In contrast, CEOs in 1980 made 42 times more than the average employee.