December 18, 2014
Pay Ratio Proposal: 7,196 Hours in the Making
– Broc Romanek, CompensationStandards.com
Here’s an article from yesterday’s WSJ:
How long does it take the Securities and Exchange Commission to develop a controversial rule forcing most companies to disclose the pay gap between CEOs and rank-and-file employees?
About 7,196 hours.
That’s how long staff of the agency have spent since 2011 on a proposal requiring companies disclose median worker pay and compare it with CEO compensation, according to SEC Chairman Mary Jo White. The figure translates to about $1.1 million in labor costs, Ms. White told House Financial Services Committee Chairman Jeb Hensarling (R., Texas) in a December 11 letter released Wednesday morning. The letter stresses the figures are rough estimates and doesn’t say the number of staff involved.
A requirement of the 2010 Dodd-Frank financial law, the rule wasn’t formally floated until September of last year and the five-member agency must vote on it a second time before it can go into effect. The commission is currently reviewing the more than 128,000 comments it has received on the proposal – many of them form letters – and Ms. White has said her goal is to complete the rule by the end of 2014. With the agency almost certain to miss that target, Mr. Hensarling and two other lawmakers urged Ms. White to delay finishing the measure, arguing in a letter last month that they are concerned the agency is “misallocating limited resources to non-essential projects.” Ms. White denied that concern in her letter last week. “The time spent by the staff on the pay ratio rulemaking does not mean that we have diminished our focus on fulfilling our rulemaking or other obligations,” she wrote. “Completion of all the commission’s mandated rulemakings continues to be a priority for me.”
Congressional Democrats continue to press the agency to finish the rule soon. Fifteen U.S. Senate Democrats, led by New Jersey’s Robert Menendez, wrote to Ms. White Tuesday asking for her to call a final vote on the rule before the end of the first quarter of 2015. “While some opponents may prefer not to disclose this information, Congress already enacted and the President already signed the requirement into law more than four years ago,” the senators wrote. “All that remains is for the implementing rules to be finalized, as the statute requires.”