December 1, 2013
Subject: I Strongly Support the Disclosure of Corporate Pay Disparities -- Comment on File Number S7-07-13: Pay Ratio Disclosure
Dear Commissioners of the Securities and Exchange Commission,
Thank you for following through on the provision of the Dodd-Frank Act that requires public companies to disclose their ratio of CEO to median-worker pay. As income inequality reaches unprecedented heights, the public has the right to know which corporations are fueling the yawning gap between rich and poor. Disclosing corporate pay ratios between CEOs and average employees will finally show which corporations are driving this trend, will reveal which corporations siphon money away from investors and into the pockets of CEOs, and, hopefully, will discourage the outrageous and reckless pay practices that fueled the 2008 crash. I strongly support a powerful Dodd-Frank rule 953(b).
Despite American workers being more productive than ever, studies show working Americans earning less and less year after year, even as CEO pay balloons and corporate profits soar. In 1990, senior executive pay absorbed 5 percent of corporate profits. Today, according to Government Metrics International, it absorbs 10 percent.
Disclosure of CEO-to-worker pay ratios are also crucial for investors. This information is important for determining whether corporations are diverting resources to executives at the expense of long-term investments and workforce development. Additionally, investors need to be able to gauge whether executives' compensation is falling in line with their performance.
Fairer pay structures mean stronger companies and a stronger economy—both of which are important to me as a consumer and as an investor. Knowing which corporations heap riches upon their executives while squeezing struggling employees will also be a useful factor for me when considering which businesses to support with my consumer and investment dollars.
No doubt there are a select few who benefit from the status quo of keeping the pay disparities undisclosed. I am aware that you are under intense pressure by business interests to weaken or abandon the rule. I urge you to stand firm against a well-funded campaign of corporate resistance to this simple disclosure rule. Industry lobbyists claim that it imposes a heavy burden on companies for no good reason. Both ends of that argument are false. The proposed rule has been crafted to simplify compliance and investors have a strong need for such information, both in order to guard against risky bets by self-seeking executives and to evaluate a company's long-term soundness. It is widely acknowledged that runaway pay practices, linked to short-term corporate gains, encourage recklessness, excessive short- termism and unethical acts.
Three years have passed since enactment of the Dodd-Frank financial reform law. Please weigh your duty to protect investors and the American public against the self-serving interests of those seeking to undermine this rule. I urge you not to delay implementation of this rule any further, and to move ahead soon with the other compensation provisions of the law.
Thank you for your consideration of my comments. Please do NOT add my name to your mailing list. I will learn about future developments on this issue from other sources.
Sincerely,
Christopher Lish
Olema, CA