October 26, 2013
Dear Securities and Exchange Commission:
I am an investor in publicly traded companies through my retirement plan and personal savings. More importantly, I am a citizen of the United States, deeply troubled by the rapid increase in inequality in the last several decades and the slower economic growth that has resulted. When justice and growth both press in the same direction, no excuse remains for allowing the powerful to seize more than their fair share of the surplus our productive firms create.
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.
High CEO-to-worker pay ratios 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.
Moreover, high CEO pay makes CEOs far more likely to fail -- effective leaders must be able to empathize with their followers, and vast economic gaps hurt empathy.
Finally, the increasing exclusion of the middle class and ordinary employees from the benefits of productivity growth threaten our capitalist system. American capitalism depends on a broad middle class as its consumer base and to drive our politics. As the law and market increasingly redistribute income and wealth upwards, we are endangering the very mechanisms that produce that wealth in the first place.
The systemic health of the stock markets require that we prevent the CEO-finance alliance from grabbing so much of the corporate pie that they cause it to shrink away. Disclosure is an important first step.