February 28, 2017
If a major corporation cannot figure out how much it pays their CEO and the typical (average) worker, and record those two numbers, how can you trust any information they provide on an SEC report or on their tax returns?
Here's an easy solution. For those corporations having trouble with this basic arithmetic, have the IRS conduct an audit of the CEO's personal tax returns for the year(s) in question. They will definitely provide you with a very precise number for the CEO's compensation. Then, send in the Department of Labor to conduct an audit of the company's payroll practice and numbers, and they can provide you with a number for annual compensation for a typical worker.
Easy-peasy. And look at all the work you will save those major corporations by having government workers perform these onerous pieces of math for them.
The U.S. Securities and Exchange Commission has long delayed the Dodd-Frank law’s requirement that public companies disclose the ratio of their CEO’s pay to the pay of their median worker. It would be outrageous to further delay or reverse progress on that rule now.
Americans need and deserve more information about corporate pay practices. Such data helps shareholders guard their pocketbooks against self-seeking executives and it helps us all evaluate the long-term soundness of companies. That’s because excessive compensation at the top encourages risky practices up and down the line—in addition to inhibiting teamwork and reducing employee morale and productivity.
There is simply no excuse to give big corporations a pass about being transparent about their pay practices.