Washington - Members of the House and Senate have called on the Securities Exchange Commission (SEC) to finally begin drafting rules requiring companies to report CEO to median worker pay ratios.
In a letter to the SEC, the 20 House members and five Senate members urged quick implementation of Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Wall Street Reform Act), which requires publicly held companies to report the ratio between the CEO's compensation and that of the median employee at that company. Rep. Keith Ellison (D-Minn.) and Sen. Robert Menendez (D-N.J.) spearheaded the effort so the information on CEO pay would quickly be available to both investors and the general public.
"A company's treatment of their average workers is not just a reflection of their corporate value system, but is material information for investors," the members wrote. "Several companies already calculate such figures for public disclosure and a number of investors have requested information similar to what Section 953(b) will reveal, but companies have denied it."
The signers note that although the bill was approved almost 18 months ago the SEC has not moved to implement this section.
Click Here to download a copy of the letter.