Battle Brews Over CEO-to-Worker Pay.
A new rule may soon require all public firms to disclose the pay gap between a company’s chief executive and its median worker. Businesses aren’t thrilled about it, according to The Wall Street Journal.
No company wants to “be out there first with a number that might make them look bad,” says Aaron Boyd, head of research for Equilar, an executive compensation data provider.
The so-called internal pay equity provision, passed as part of the July 2010 Dodd-Frank package of financial reforms, is intended to expose the income disparity within public companies and help investors better evaluate firms.
If the Securities and Exchange Commission meets its deadline, guidelines for the rule could be issued by the end of June, though experts predict the timetable will be postponed as regulators work through the complexities of how to calculate the statistic. (It wouldn’t be the first postponement: The rules were originally slated to be released by end of 2011.)
While most U.S. companies say they have a sense of their internal pay ratio, seven in 10 haven’t begun considering how to comply with the rule, according to a poll conducted for The Wall Street Journal by executive search firm Korn/Ferry International. Read the rest by Leslie Kwoh for the WSJ.com