If the idea behind the SEC's new CEO pay ratio requirement was to somehow shame top executives over their compensation packages, that strategy won't work.
A study by Towers Watson asked 375 corporate executives and compensation professionals what their primary concerns were about the proposed rule, which would require public companies to disclose the ratio of their CEO compensation to the median compensation of all other employees. The ratio is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The feedback the researchers received was basically this: We're not worried about how the ratio looks to the public or our board. But mining the information required to arrive at the ratio will be a big pain.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
