March 20, 2017
March 15, 2017
Acting Chair Michael Piwowar
Commissioner Kara Stein
As an economist, I have written extensively on the costs of skyrocketing CEO pay* and I write to comment that I am in full support of Section 953b of the Dodd-Frank Wall Street Reform and Consumer Protection Act or the CEO/worker pay ratio disclosure rule.
This disclosure rule is crucially important for indicating to shareholders, to workers, and to the public whether or not manager and boards are governing companies responsibly.
There is ample research to suggest that relatively high CEO pay creates bad incentives that lead to excessive risk taking, diminished investments in corporations, and even fraudulent activity. 953b provides an incredibly useful indicator for measuring the potential of these outcomes and it is essential that you do not disrupt the implementation of this rule.
Dr. Susan R. Holmberg