A lesser-known wrinkle in the Dodd-Frank Wall Street reform law is sending corporations scrambling to comply.
In the future, CEO's salaries will be public information and the ratio between compensation and bonuses paid to the top cats and all other corporate employees will be required reading in disclosure reports.
It's got the bean counters buzzing and the big wigs
blustering.
Inserted into the massive, 2,000-page bill "at the last minute," this provision is "a political disclosure, as opposed to an economic disclosure," said a corporate governance professor from The University of Delaware, Charles Elson.
According to the Standard & Poor Index, the median salary of
a corporate CEO of any top 500 company is $1,025,000, or 25
times that paid to the average private sector employee at
$40,174.
A total pay package of $7.5 million for a chief executive is
187 times that of the average employee and 19 times
President Barack Obama's annual salary of $400,000.
It's an emotional issue, one that will have little appeal to
the average small shareholder. Already, the lawyers are
finding ways to skirt the law.
One way is to eliminate the marketing program of company
stores and use private contractors. This way, the
relatively low pay involved will not affect the bottom line
on the CEO's ratio of pay to that of the lowest paid
employee.
SEC officials are charged with drafting the regulations that
will determine the actual operation of the new law.
Business groups are clamoring for fair and consistent
regulations.
It would take one full time accountant to comply with this
portion of the reform law alone, certain key honchos
complain.
In the future, CEO's salaries will be public information and the ratio between compensation and bonuses paid to the top cats and all other corporate employees will be required reading in disclosure reports.
It's got the bean counters buzzing and the big wigs
blustering.
Inserted into the massive, 2,000-page bill "at the last minute," this provision is "a political disclosure, as opposed to an economic disclosure," said a corporate governance professor from The University of Delaware, Charles Elson.
According to the Standard & Poor Index, the median salary of
a corporate CEO of any top 500 company is $1,025,000, or 25
times that paid to the average private sector employee at
$40,174.
A total pay package of $7.5 million for a chief executive is
187 times that of the average employee and 19 times
President Barack Obama's annual salary of $400,000.
It's an emotional issue, one that will have little appeal to
the average small shareholder. Already, the lawyers are
finding ways to skirt the law.
One way is to eliminate the marketing program of company
stores and use private contractors. This way, the
relatively low pay involved will not affect the bottom line
on the CEO's ratio of pay to that of the lowest paid
employee.
SEC officials are charged with drafting the regulations that
will determine the actual operation of the new law.
Business groups are clamoring for fair and consistent
regulations.
It would take one full time accountant to comply with this
portion of the reform law alone, certain key honchos
complain.
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