November 21, 2013
Dear Securities and Exchange Commission:
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.
I do think, however, that the methodology needs to be clearly defined. If it is not defined, it will be abused and will become a meaningless number. DEFINE THE METHODOLOGY!
Pteer HerrmanDenton, MD