Public cos. to report pay gap between CEOs, employees

http://www.bostonherald.com/business/business_markets/2015/08/public_cos_to_report_pay_gap_between_ceos_employees

Public cos. to report pay gap between CEOs, employees
Thursday, August 6, 2015
Marie Szaniszlo

Most public companies will be required to reveal the pay gap between CEOs and their employees under a long-delayed rule approved by federal regulators yesterday.

Beginning in 2017, companies will have to report the ratio between their chief executive’s compensation and median employee pay in their annual financial reports. Public companies with less than $75 million in shares held externally or less than $50 million in annual revenue are exempt from the disclosure, as are emerging growth companies and investment companies. The rule, approved by a 3-2 vote of the Securities and Exchange Commission, was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act approved by Congress five years ago in the wake of the financial crisis.

“By bringing transparency to outrageous corporate compensation practices, the SEC decision will hopefully expand the national discussion taking place concerning income inequality that has reached historically unprecedented levels,” said Rich Rogers of the Greater Boston Labor Council.

Business groups have argued the information will be costly to gather. The U.S. Chamber of Commerce maintains it will cost U.S. companies more than $700 million a year. The SEC’s estimate is about $73 million. The Greater Boston Chamber, Associated Industries of Massachusetts and the New England Council had no comment.