October 26, 2013
Dear Securities and Exchange Commission:
***Disclosure of this information is necessary for shareholders to assess whether the directors are allocating resources in a manner that is beneficial to the shareholders, or beneficial to their friends in the executive office. The ratio of executive to median pay in large corporations has increased dramatically in recent decades, and it is not obvious that this reflects increased value to the company produced by executives of increased intelligence or merit. Disclosure of this ratio will force corporate directors to justify their dispersal of corporate resources, and curb the worst instances of cronyism within social networks of directors and executives.***
I am an investor in publicly traded companies through my retirement plan and personal savings.
I strongly support the SEC’s proposal requiring companies to disclose the CEO-to-median worker pay ratio, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Pay ratio disclosure will help investors evaluate CEO pay levels when voting on executive compensation matters. The ratio of the CEO-to-worker pay is a valuable metric for investors, because it places CEO pay levels into a broader perspective.
For example, investors may use pay ratios as a factor when casting say-on-pay votes. Pay ratio disclosure also will help investors better understand their company’s overall compensation for all employees.
High CEO-to-worker pay ratios can have a negative impact on employee morale and productivity. Disclosure of the pay ratios will help the capital markets better allocate capital to those companies that invest in their workforces.
Jim SteitzGatlinburg, TN