After years of delays, the SEC has just voted to enact a potentially game-changing provision of the Dodd-Frank Act on CEO compensation.
The new provision requires corporations to disclose the amount their CEOs make compared to the salary of the median worker. Corporations are shocked because the rule is surprisingly strong -- closing the loopholes that corporations normally use to skew data.
The U.S. Chamber of Commerce and other big business organizations are frightened, and are fighting back, pressuring the SEC to soften the provisions language during the current sixty-day comment period.
This data is valuable for investors, as it helps them determine which companies are dangerously overloaded at the top. The new disclosure will create downward pressure in the industry by rewarding companies with more reasonable salary hierarchies. It will also get workers talking, and put overpaid executives in the spotlight. This could be a game-changer for out-of-control inequality andhelp stop the wild greed at the top of the largest companies in the US.
There is a petition circulating regarding this corporate disclosure.