Sen. Ted Cruz (R-Texas) spent more than 21 hours ripping away at Obamacare ostensibly on behalf of the little guy. In that spirit, we thought it might be worthwhile to discuss something that actually would annoy people. (That is, besides having to listen to the high-pitched Ted Cruz re-interpret Dr. Seuss in his quest to shut down the government.) The pay gap.
Last Wednesday, the Securities and Exchange Commission, “addressing an issue that has captured the public’s attention like few others at the agency, proposed a rule … that would require publicly traded companies to disclose the difference between the pay of chief executives and their employees.” As the New York Times Dealbook wrote,
The gap in pay between chief executives and rank-and-file employees has been growing steadily, and now regulators want companies to tell investors just how wide it is.
The proposal is part of the Dodd-Frank financial overhaul legislation, which requires the S.E.C. to amend existing rules on pay disclosure. Publicly listed companies are now required to disclose the compensation of their chief executives but not pay for other employees.
The commission has proposed that companies disclose two additional data points in their filings. One is the median of the total compensation for all employees excluding the chief executive, and the other is the ratio between that number and the chief’s annual total compensation.
The median pay package for the country’s top 200 executives was $15.1 million last year, according to Equilar, the executive compensation analysis firm. That was an increase of 16 percent from 2011.…
Executive pay is now more than 277 times an average worker’s pay, compared with just 20 times in 1965, according to the Economic Policy Institute.
This kind of pay gap is “bad for productivity and for morale,” noted one expert. Also, as noted by the Times, which editorialized in favor of this proposal,
The information is vital. It would allow investors to more accurately judge the effect of pay structures on company performance. It would inform investors’ votes on executive pay, because it would be a benchmark for determining whether executive pay is excessive. It would help regulators and policy makers detect bubbles and impending crashes, because those often correlate to widening pay gaps. It would help alert consumers and taxpayers to companies where work forces are underpaid, even as executive pay soars, a circumstance that often requires taxpayer dollars be spent on assistance to low-wage workers.
For the next 60 days, the S.E.C. will gather public comment on its pay ratio proposal. Count us in favor.
Us too. Indeed, we’ve been keeping track specifically of insurance industry executive compensation, and those levels will blow your mind:
As the insurance industry pushes for laws that deprive sick and injured Americans of their right to be fairly compensated in court, many insurance executives continue to collect tens of millions of dollars in compensation each year.
According to data released by the Securities & Exchange Commission, 114 insurance executives received compensation of $5 million or more in 2012, with 40 receiving $10 million or above. That same year, an additional 164 executives received $2,500,000 to $4,999,999 in compensation.
My guess is that spending 21 hours complaining about that would help bring Mr. Cruz back from that wacky limb he's put himself on. Nah.