Can they help to fix Wall Street?
New rules proposed today by commissioners in the
U.S. Securities and Exchange Commission.
The draft measures by the U.S. Securities and Exchange Commission will likely spark debate among labor groups, which typically support such disclosures, and trade groups such as the U.S. Chamber of Commerce, which are often critical of them.
The proposal calls for companies to provide a table in their proxy statements that contains the total compensation paid to their principal executive, the total shareholder return on an annual basis, and the shareholder return on an annual basis of peer group companies, among other things.
There would be other top executive disclosures required as well—
COOs and CFOs would not be omitted.
Large and mid-sized companies would have to provide the disclosures for the past five fiscal years, and smaller companies would need to offer three fiscal years worth of data.
Smaller companies would not have to provide a peer group comparison.
The plan is part of the mandated disclosures section in the 2010 Dodd-Frank reform law that Republicans have been working so hard to get
rid of the last few years. Well, nothing has
changed in that regard.
Organized labor groups such as the AFL-CIO strongly support the CEO pay ratio rule, but Republicans and the U.S. Chamber of Commerce have staunchly opposed it.
The SEC's two Republicans said on Wednesday they felt the rule represents a "one-size-fits-all" approach that could confuse investors.
Cartoonishly evil should be the new GOP catchphrase.