Frank Pasquale at Balkinization:
The Dodd-Frank Act also promises to shed some sunlight on ever-rising CEO pay levels. As Sam Pizzigatti explains, “corporations must now also report their overall wage ‘median’ and the ratio between this median and their top pay.” Seizing on some laughable comments on how “unduly burdensome” the law is, “the House Financial Services Committee’s Capital Markets Subcommittee [recently] approved, by a vote of 20 to 12 . . . legislation (H.R. 1062) to repeal the Dodd-Frank pay ratio mandate.”
Here’s the argument for why this requirement is “unduly burdensome”:
The burden of this median pay calculation requirement is significant. It would require a company to gather and calculate compensation information for each employee as required for senior executives under the SEC disclosure rules, determine the pay of each employee from highest to lowest, and then identify the employee whose pay is at the midpoint between the highest- and lowest-paid employee. No public company currently calculates each employee’s total compensation as it calculates total pay for CEOs on the proxy statement; therefore, companies would be required to invest considerable resources to implement this mandate to produce a meaningless statistic.
And, OMG, many companies have overseas offices with different pay systems on, get this, different computers!!
Do you hear that noise? That, my friends, is the sound of oligarchy.