By Brandon Rees, AFL-CIO
Today, more than 100 institutional investors with a combined $3 trillion in assets under management sent a letter to the U.S. Securities and Exchange Commission in support of a CEO-to-worker pay ratio disclosure. The signatories of the investor statement on pay ratio disclosure include a variety of pension plans, asset managers, foundations, faith-based funds and state treasurers.
SEC Acting Chairman Michael Piwowar has solicited additional public comment on the SEC’s pay ratio disclosure rule. This rule is scheduled to go into effect next year and will provide material information to investors on how CEO pay levels compare to company employees. Today’s letter to the SEC on pay ratio disclosure shows that investors strongly desire this information.
“It is a shame that the SEC is reconsidering its implementation of the ‘pay ratio’ disclosure requirement,” said AFL-CIO President Richard Trumka. “Seven years is way too long to wait for a commonsense rule that gives investors material information and increases transparency. As shareholders, we deserve to know whether CEO pay is out of balance in comparison to what a company pays its employees.”
The SEC’s pay ratio disclosure rule is required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act to provide investors with more context when voting on CEO pay. According to the AFL-CIO’s Executive PayWatch, CEO pay at S&P 500 Index companies remains a stubbornly high 335 times the average nonsupervisory worker’s pay in the United States.