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“It was misaligned pay that caused bankers to blow up Wall Street in the first place." -- Bartlett Collins Naylor of Public Citizen
WASHINGTON, Sep 19 2013 (IPS) - Regulators here are proposing that most U.S. corporations be required to provide annual public reporting on how the pay received by their chief executive compares to that of their average workers, a requirement proponents say could be a first step in reining in an unprecedented swelling in executive compensation.
If the rule is adopted, corporations would need to calculate this ratio for all workers, “including full-time, part-time, temporary, seasonal and non-U.S. employees”, according to an official release. This would also apply to workers employed by a company’s subsidiaries, including those not located in the United States.
The Securities & Exchange Commission (SEC), which voted to approve the proposal on Wednesday, was directed by the U.S. Congress to create the pay gap rule nearly three years ago. Although full details have not yet been made public, proponents of the rule say the proposal
appears to have come out quite strong.
“We think it’s a home run – it includes basically everything we wanted,” Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, a Washington think tank, told IPS.“There was an intense effort made to water down this rule, particularly to allow companies to exclude overseas and part-time seasonal workers, so we’re thrilled to see the SEC stood up to that pressure. It’s important that shareholders and the public understand that the process of globalising the workforce and the extreme pay gap within companies have just as much of a detrimental effect for U.S. companies that might be operating in other countries as for U.S.
workers.”
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