CEO Worker Pay Ratios

Drew Harwell writes;  Thousands of public U.S. companies are likely to soon be forced to share a number many would rather keep under wraps: how much more their chief executives make than their typical rank-and-file employees.

The Securities and Exchange Commission  is expected to finalize on Wednesday a long-delayed rule forcing businesses to share their “pay ratio,” a simple bit of arithmetic that would cast an unprecedented spotlight on one of corporate America’s thorniest debates.

Once the pay-ratio rule is in place, millions of workers will know exactly how their top boss’s payday compares with their own, revealing a potentially embarrassing disparity in corporate riches that many companies have long fought to keep hidden.

While the average American’s pay and benefits have been growing at the slowest pace in 33 years, executive wages have soared. Fifty years ago, the typical chief executive made $20 for every dollar a worker made; now, that gap is more than $300 to $1, and it’s growing.

The pay ratio, at the center of years of corporate arm-wrestling, could ratchet up the pressure on big companies to bring runaway executive pay under control. Boards and shareholders could use it to judge a firm’s high-priced leadership, and customers could opt to shop at companies where workforce pay seems more fair.

The effects could ripple far beyond the corporate suite.Out-of-balance pay ratios “will be public shaming, just as all adverse financial results are public shaming,” said Bartlett Naylor, a financial policy advocate with the consumer think tank Public Citizen. “If one reports low returns, skyrocketing expenses, that’s shameful, too. Welcome to capitalism.”  CEO Worker Pay Ratios

 CEO Worker Pay Ratios