It doesn’t matter whether you can make it to DC – because the October 17-18th Conference is available to watch online by video webcast, live on those specific days or by video archive at your convenience. And in addition to the October Conference, you gain access to three pre-conference webcasts – and this set of “Model Pay Ratio Disclosures” in both PDF & Word format.
Register Now: This is the only comprehensive conference devoted to pay ratio. Here’s the registration information for the “Pay Ratio & Proxy Disclosure Conference” to be held October 17-18th in Washington DC and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days.
It is one of the last taboos. You can swear on television and breastfeed in public, but you cannot talk about how much you earn. Not in Britain, at least. Viewed from Scandinavia, the controversy around the UK government forcing the BBC to reveal the salaries of its top presenters was hard to understand.
Each year Sweden, Finland and Norway publish everyone’s income tax returns. In Sweden anyone can find out anyone’s salary with a quick phone call to the tax authorities. The person whose returns you request will know it was you, but that is all. You can know how much your neighbour earns, and how much tax she pays. The practice dates back to the 18th century. Different cultures have different ideas about privacy. The British seem not to mind being watched by millions of surveillance cameras, but they do not want their salaries to be public record. In Sweden it is the other way around.
For many Britons, how much someone earns is not information that belongs in the public space. Money is private. Except, of course, it is not. Having more information tends to help people make better decisions and the economy to work better. Why should pay be any exception? “The personal is political” used to be the slogan of second-wave feminists. And most political progress for women has required some kind of renegotiation of the border between the private and the public sphere.
The debate about pay transparency is no different. The salaries of BBC presenters such as Gary Lineker or John Humphrys are not strictly private matters — they are part of a larger pattern in which the average pay gap between men and women in the UK is 18 per cent. It might not be “very nice” to talk about, as the actor Kate Winslet put it, but that does not make the conversation any less necessary.
In Sweden, businesses with 25 or more employees have to establish an equality action plan. And companies with big pay gaps face fines if they fail to take steps to close them. The Swedish gender pay gap has become smaller since this system was introduced, but it is still 15 per cent. Finland, where tax returns are also public, has a gender pay gap similar to that of the UK.
One reason for Sweden’s gender pay gap being relatively high is the segregated nature of the labour market. A large proportion of women work in the public sector, where pay is low. But if you only measure men and women doing the same jobs, Sweden does much better. The pay gap here is 6 per cent.
Pay transparency probably has a lot to do with this. It also has other benefits. In 2015, the American company PayScale surveyed more than 70,000 US employees. The resulting study showed that the more people knew about why they earn what they earn, especially in relation to their peers, the less likely they were to quit. Dave Smith of PayScale said that “open and honest discussion around pay was found to be more important than typical measures of employee engagement” — career advancement, say, or earning the approbation of one’s boss.
Having more information tends to help people make better decisions and the economy to work better. Why should pay be any exception? One of the reasons people in Scandinavian countries tend to be more relaxed about talking about money is that what you earn carries less weight there. But in a more unequal society, like Britain, where quality of life is closely tied to income, conversations about pay are much more freighted.
John Maynard Keynes once dreamt of a world in which economics is less important. Once our economic problems are solved, he thought, we would be free to focus on other things. Economists would be “thought of as humble, competent people on a level with dentists”. Maybe one day talking about how much you earn might be no more fraught than talking about the weather. Even in Britain.
For those registered for our comprehensive “Pay Ratio & Proxy Disclosure Conference“, we have posted the transcript for our popular webcast: “Pay Ratio Workshop – What You (Really) Need to Do Now.”
The first webcast was on July 20th – and the second webcast was on August 15th; transcripts & audio archives are available for both. The third webcast is on September 27th.
It doesn’t matter whether you can make it to DC – because the October 17-18th Conference is available to watch online by video webcast, live on those specific days or by video archive at your convenience. And in addition to the October Conference, you gain access to three pre-conference webcasts – and this set of “Model Pay Ratio Disclosures” in both PDF & Word format.
Register Now: This is the only comprehensive conference devoted to pay ratio. Here’s the registration information for the “Pay Ratio & Proxy Disclosure Conference” to be held October 17-18th in Washington DC and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days.
According to this article, 146 companies in the Russell 3000 switch from triennial to annual votes for say-on-pay during this cycle of say-on-frequency voting. Companies are required to allow shareholders to vote on the frequency of their say-on-pay every six years – with this year being the second time around for this cycle.
A “say-on-pay” investor working group sent letters to 319 Russell 3000 boards that had a triennial vote in 2011 urging them to recommend an annual vote – and of the 273 companies contacted (that have already held their ’17 annual meetings), 53% adopted an annual frequency & 47% retained the triennial.
In this 26-minute podcast, James Kim of Frederic W. Cook discusses his exciting career, including:
1. How did you wind up getting into the compensation consultant industry?
2. What do you tell people that you do when you first meet them?
3. What are your remembrances of Bud Crystal?
4. What are the hot topics that you’re grabbling with now?
5. Are your clients preparing for the coming pay ratio rule?
6. What are the hardest parts of your job?
7. What are the best parts of your job?
8. What advice would you give to someone new in your field?
This podcast is also posted as part of my “Big Legal Minds” podcast series. Remember that these podcasts are also available on iTunes or Google Play – use the “My Podcasts” app on your iPhone and search for “Big Legal Minds”; you can subscribe to the feed so that any new podcast automatically downloads…
Hat tip to Deloitte Consulting’s Mike Kesner for sharing this 1977 WSJ op-ed from Peter Drucker on the notion of pay ratios. Executive pay was considered excessive even back then!
– Mark Borges, Principal, Compensia
– Keith Higgins, Partner, Ropes & Gray
– Scott Spector, Partner, Fenwick & West
Register Now: This is the only comprehensive conference devoted to pay ratio. Here’s the registration information for the “Pay Ratio & Proxy Disclosure Conference” to be held October 17-18th in Washington DC and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days. Register today.
– Mark Borges, Principal, Compensia
– Keith Higgins, Partner, Ropes & Gray
– Scott Spector, Partner, Fenwick & West
Register Now: This is the only comprehensive conference devoted to pay ratio. Here’s the registration information for the “Pay Ratio & Proxy Disclosure Conference” to be held October 17-18th in Washington DC and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days. Register today.
Here’s an excerpt from this new study from the “Economic Policy Institute” about relative pay levels:
By this measure, in 2016 CEOs in America’s largest firms made an average of $15.6 million in compensation, or 271 times the annual average pay of the typical worker. While the 2016 CEO-to-worker compensation ratio of 271-to-1 is down from 299-to-1 in 2014 and 286-to-1 in 2015, it is still light years beyond the 20-to-1 ratio in 1965 and the 59-to-1 ratio in 1989. The average CEO in a large firm now earns 5.33 times the annual earnings of the average very-high-wage earner (earner in the top 0.1 percent).
– Mark Borges, Principal, Compensia
– Keith Higgins, Partner, Ropes & Gray LLP
– Scott Spector, Partner, Fenwick & West LLP
Register Now: This is the only comprehensive conference devoted to pay ratio. Here’s the registration information for the “Pay Ratio & Proxy Disclosure Conference” to be held October 17-18th in Washington DC and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days. Register today.
We have posted a new anonymous “Quick Survey about Pay Ratio Disclosure” to learn whether folks are intending to disclose the bare minimum about pay ratio – or whether they intend to provide explanations, alternate ratios, carve-outs, etc. This is different than our recent survey about pay ratio readiness. Please take 10 seconds to participate…and also complete this “Quick Survey on Director Compensation.”
– Mark Borges, Principal, Compensia
– Keith Higgins, Partner, Ropes & Gray LLP
– Scott Spector, Partner, Fenwick & West LLP
Register Now: This is the only comprehensive conference devoted to pay ratio. Here’s the registration information for the “Pay Ratio & Proxy Disclosure Conference” to be held October 17-18th in Washington DC and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days. Register today.