WASHINGTON, DC - U.S. Senator Robert Menendez, author of the provision in the Dodd-Frank Wall Street Reform Act to require public companies to disclose how much more their CEOs are paid than rank-and-file workers, today applauded the SEC for moving forward with implementation of the requirement.
"I welcome the SEC's step today towards implementing this important rule and I look forward to reviewing their proposal," said Sen. Menendez, who sits on the Senate Banking and Finance Committees."I'm encouraged by the initial information out of the SEC today, but want to review the proposal to ensure that it strikes the right balance between flexibility and accountability. It's been over three years since Wall Street Reform required public companies to report on pay disparities between CEOs and their average workers, and since then the gulf between them has only grown. We have middle class Americans who have gone years without seeing a pay raise, while CEO pay is soaring. This simple benchmark will help investors monitor both how a company treats its average workers and whether its executive pay is reasonable."
According to data compiled by Bloomberg news, across the Standard & Poor's 500 Index of companies, the average multiple of CEO compensation to that of rank-and-file workers is 204 - up from 170 in 2009 - with executives at some companies raking in more than 1000 times as much as their average worker. Over the last decade, median family income fell for the first time since the Great Depression.
Senator Menendez authored the provision requiring disclosure of the ratio, which was included as Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. While there was no deadline by which the rule must be finalized, some companies have fought against it, claiming it increases compliance costs and is overly burdensome.Menendez has been calling on the Commission to issue the rules needed to implement the requirement since the law passed three years ago, including letters in 2011, 2012 and, most recently, speaking directly to SEC Chair White.
December 03, 2021