Activism
Americans for Financial Reform

Why are they trying to hide CEO pay?

Burgess COMMENTARY

Peter Burgess

Why are they trying to hide CEO pay?

Dear Peter,

Runaway executive pay had a lot to do with the wave of reckless behavior on Wall Street that produced the financial and economic meltdown of 2008. In one modest response, the Dodd-Frank Act told the Securities and Exchange Commission to write a rule requiring banks and other public companies to disclose the ratio of their CEO’s compensation to their median worker’s.

After taking more than five years to complete the pay-ratio rule, the SEC may be trying to undo it. Why? Wall Street and other big corporations don’t want us to know just how huge that gap is. Taking their side, the Commission’s Acting Chair, Michael Piwowar, was dead set against the rule from the start. Now he’s using his temporary powers to order a 45-day review, while inviting companies to report on “any unexpected challenges” they may have experienced “and whether relief is needed.”

Tell Acting SEC Chair Piwowar and his fellow commissioners to let the pay-ratio rule alone.

Wall Street will no doubt seize the opportunity to complain about the supposedly heavy burden of fulfilling this requirement. Because apparently, it’s really hard work to count up all the millions of dollars their CEOs and executives are making. This complaint was ridiculous the first time around. It still is. They simply don’t want us to know just how enormous the gap is.

Pay data not only helps shareholders guard their pocketbooks against self-seeking executives; it helps us all do a better job of gauging the long-term soundness of companies. That’s because excessive compensation at the top encourages risky practices up and down the line - in addition to inhibiting teamwork and reducing employee morale and productivity. There is simply no excuse for regulators to give big corporations a pass in being transparent about their pay practices.

We deserve to know how much more CEOs make than a typical worker. Tell the SEC and the Trump Administration to show some backbone and stand up to Wall Street.

Thank you for everything you do.

Jim Lardner
Americans for Financial Reform

Here at Americans for Financial Reform, we work day in and day out to make sure the big banks don't always get the last word – with the press, with regulators, and with legislators. We try to shine a spotlight on key decisions facing the bank oversight agencies and lawmakers, so more people can see what they’re doing and hold them accountable. And we work to build a chorus for reform, to push policymakers in the legislative and executive branches to stand up to Wall Street and adopt and enforce tough new rules. Anything you can do to help -- by signing petitions, donating money to our efforts, or speaking out in any other way -- puts more wind in our sails and makes a real difference.

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