SEC mandates disclosure of the pay ratio between CEOs and workers
The US Securities and Exchange Comission (SEC) added regulations today mandating that companies disclose the pay ratio between their workers and CEOs.
The median pay calculated by companies has some exceptions: companies can exclude 5% of their overseas workers from the median.
Unsurprisingly, there is disagreement on the new rules between politicians on the left and the right.
"Pay ratio disclosure should provide a valuable piece of information to investors," Democratic Commissioner Kara Stein said.
"To steal a line from Justice Scalia, this is pure applesauce," SEC Republican Commissioner Daniel Gallagher said, referring to Scalia's dissent on the recent Supreme Court ruling supporting the Affordable Care Act.
Facts about ceo-worker pay ratios:
A 2014 study showed that the ratio between CEO and worker pay has multiplied from 20 times higher in 1965 to 295.9 times higher in 2013.
A New York Times analysis of estimates this year concluded that Walt Disney had the highest gap on their list, with CEO Robert Iger making $43.7 million and a median employee making $19,530. This means that Disney's CEO makes 2,238 time that of a median employee salary.
A 2014 study at Harvard Business School found that Americans estimate that CEOS make only 30 times as much as regular employees, when, in fact, the real number is around 350.