Legal News

SEC Official Wants Companies to Disclose Salary Inequities to Shareholders
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

In a rare move, on Wednesday, SEC Democratic Commissioner Luis Aguilar issued a statement urging companies to provide shareholders more details on compensation packages voluntarily, rather than wait around until SEC issues rules to mandate such disclosures.

In his statement, Aguilar said that it would be a sign of good governance if companies voluntarily started making disclosures of salary packages, because shareholders deserve knowledge of how the pay of lower-level employees compare with that of the CEO, or how long-term performance of companies tally with executive pay packages.

Aguilar’s comments, made just before the Proxy season when companies hold their annual shareholder meetings can compel some companies to make additional disclosures rather than have SEC issue a rule about that.

  
What
Where


Aguilar said, “The relative pay of different classes of employees, such as the ratio between CEO compensation and median pay, can… create risks to an enterprise, including the risk of employee, customer, and shareholder discontent.”

While such disclosures of salary packages and relation to long-term company performance had been one of the key provisions of Dodd-Frank reforms, the SEC has refrained from issuing the rules in the face of opposition from powerful lobbies and companies who say revealing the pay ratio would put big burdens on companies.

Last year, business groups had sent a letter to the SEC remarking, “Obtaining the data will be difficult and time-consuming as the definition of compensation among countries will vary widely, and companies will face difficulties attempting to rationalize compensation with currency fluctuations.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




SEC spokesman John Nester said that there is no statutory deadline for issuing the rules to force revealing salary packages and comparisons, but the SEC staff is “working had to get a recommendation to the commission for consideration.”

Last year, a group of Democrats from the U.S. House and Senate had urged the SEC to hasten the process, observing that “a company’s treatment of their average workers is not just a reflection of their corporate value system, but is material information for investors.”



However, currently, after SEC Chairman Mary Schapiro left the agency, the SEC has two Democrats and two Republicans on board – locked in a stalemate.



 

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Complex Litigation Attorney with 3-5 years of arbitration experience

USA-FL-Miami

Miami office of our client seeks complex litigation attorney with 3-5 years of law firm experience i...

Apply Now

Senior Business & Commercial Litigation Attorney

USA-CA-Irvine

Irvine office is seeking a business and commercial litigation attorney with 5+ years of experience. ...

Apply Now

Commercial Litigation Attorney with 1-3 years of experience

USA-TX-Dallas

Dallas office of our client seeks litigation attorney with 1-3 years of experience. The candidate wi...

Apply Now

Labor and Employment Attorney with 3-4 years of litigation experience

USA-CA-Los Angeles

Los Angeles office of our client seeks labor and employment attorney with 3-4 years of litigation ex...

Apply Now

RELEVANT JOBS

Paralegal

USA-AL-Montgomery

Overview The Southern Poverty Law Center is dedicated to fighting hate and bigotry and to seeking...

Apply now

Legal Assistant- Bilingual

USA-NV-Las Vegas

Prestigious personal injury firm seeks superstar BILINGUAL legal assistant! Candidate MUST have...

Apply now

Commercial Real Estate Associate

USA-NY-Rochester

Searching for an experienced commercial real estate associate. Ideally, this candidate has gained th...

Apply now

Paralegal / Legal Assistant

USA-LA-New Orleans

New Orleans law firm, Herman, Herman & Katz, seeking to hire a paralegal with at least five years ex...

Apply now

Most Popular

SEARCH IN ARCHIVE

To Top