S.E.C. Approves Rule on C.E.O. Pay Ratio – The New York Times

After a long delay and plenty of pushback from corporate America, the Securities and Exchange Commission approved on Wednesday a rule that would require most public companies to regularly reveal the gap between the compensation of the chief executive and the pay of the rest of their employees.

The rule, which stems from the 2010 Dodd-Frank overhaul of financial regulation, gives companies considerable flexibility in calculating the pay gap, suggesting that the S.E.C. was receptive to concerns about cost and complexity that corporations expressed.

Still, the data point, which calculates the ratio of a chief executive’s compensation to the median compensation of a company’s employees, could further stoke the debate over income inequality that has intensified in recent months. Fifty years ago, chief executives were paid roughly 20 times as much as their employees, compared with nearly 300 times in 2013, according to an analysis last year by the Economic Policy Institute.

via S.E.C. Approves Rule on C.E.O. Pay Ratio – The New York Times.

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