Did you know that Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires publicly traded companies to disclose the ratio of CEO pay as a “proportion of the median-paid employee at the firm”?
And although this provision is in the bill, it hasn't been implemented because the Securities and Exchange Commission has yet to propose a single regulation for public comment, "which would get the ball rolling on enforcing the act," writes Chris Morran of The Consumerist.
In response to this the SEC's failure to do this, several members of the Congress and Senate have written the federal agency, imploring it to act.
Here is an excerpt from the letter sent to SEC Chair Mary Schapiro:
[I]ncome inequality is a growing concern among many Americans. Incomes at the very top have skyrocketed while workers' wages and incomes have stagnated. In fact, over the last decade, median family income actually fell for the first time since the Great Depression. And while comprehensive data will not be available until this provision takes effect, there is no question that CEO pay is soaring compared to that of average workers. In 1980, CEOs of larges U.S. companies received an average of $624,996 in annual compensation, or 42 times the pay of typical factory workers. But by 2010, large company CEO pay had skyrocketed to $10.8 million, or 319 times the median worker's pay.
Unsurprisingly, several companies have fought the regulation, using the excuse that it would “be difficult to figure out the median pay of their staff,” Morran writes. But lawmakers (and even the SEC’s own accountant) think this is a load of nonsense and that it wouldn’t be that “complex a calculation for a business to make.”
"Such claims either constitute an embarrassing confession about widespread mismanagement of a central financial issue, or a disingenuous smokescreen," writes Public Citizen's Bartlett Naylor. "The idea that firms have no idea what they pay their staff is ludicrous."
According to The Consumerist, lobbyists have spent in excess of $4.5 million trying to have this provision swept under the rug.
And although one may question whether the companies can do the "complex calculation," or why they would lobby to have this regulation "swept under the rug," perhaps the bigger question is this: why, exactly, does Dodd-Frank require publicly traded companies to disclose this information?
In case you were wondering, here are the signatures from Congress:
Rep. Keith M. Ellison (D-MN)
Rep. John Olver (D-MA)
Rep. John Conyers (D - MI)
Rep. Luis V. Gutierrez (D-Ill)
Rep. Louise Slaughter (D-NY)
Rep. Pete Stark (D-CA)
Rep. Edolphus Towns (D-NY)
Rep. Maxine Waters (D-CA)
Rep. Mel Watt (D-NC)
Rep. Elijah E. Cummings (D-MD)
Rep. Rubén Hinojosa (D-TX)
Rep. Barbara Lee (D-CA)
Rep. Michael Capuano (D-MA)
Rep. Jan Schakowsky (D-Ill)
Rep. Bob Filner (D - CA)
Rep. Raul Grijalva (D-AZ)
Rep. Brad Miller (D-NC)
Rep. Peter Welch (D-VT)
Rep. Andre Carson (D-IN)
Rep. Gary Peters (D - MI)
And the five celebrity-style autographs from the Senate can be seen here.