A new proposed federal rule would require public companies to list their chief executives' total annual compensation as a ratio to the their workers' median pay. The Securities and Exchange Commission will consider the rule Wednesday.
The rule will be discussed at the SEC's open meeting that starts at 10 a.m. ET; we'll update this post with news of whether the commission adopts it.
Under the rule, many public companies must publish "the ratio of the annual total compensation of the chief executive officer to the median of the annual total compensation of the company's employees."
Today's vote comes five years after Congress adopted the Dodd-Frank Wall Street Reform and Consumer Protection Act, which includes the pay ratio rule. The vote also comes nearly two years after the SEC formally proposed the rule.
The rule would not apply to "emerging growth" and small companies, the SEC says. The agency defines emerging growth businesses as those with less than $1 billion in annual gross revenue.
More than 280,000 public comments supporting the pay ratio rule were submitted to the SEC. The agency has posted those comments online — and summarized others into groups based on their content.
For instance, some 70,000 comments included a sentence like this one, the SEC says:
"As income inequality reaches unprecedented heights, the public has the right to know which corporations are fueling the yawning gap between rich and poor."
And the agency says that nearly 20,000 comments included these ideas:
"Disclosing corporate pay ratios between CEOs and average employees will discourage the outrageous and reckless pay practices that fueled the 2008 crash. "Knowing which corporations heap riches upon their executives while squeezing struggling employees also will be a useful factor for me when considering which businesses to support with my consumer and investment dollars."
Copyright 2015 NPR. To see more, visit http://www.npr.org/.
