Pay ratios

Executive Compensation

Compensation Committee Leadership Network, December 2013

Compensation Committee Leadership Network (CCLN) members did not mince words in their reactions to the proposed rule put forward by the Securities and Exchange Commission (SEC) requiring disclosure of the ratio of CEO-to-worker pay. “On all my boards, we think the pay ratio rule is ridiculous. It will create a tremendous amount of work without a single positive outcome,” one member said.

Although most members see the rule as a “distraction” and “useless,” many CCLN members noted that the rule reflects a real and important level of popular concern about pay equity. Members discussed the pay ratio rule and some of the broader themes it raises during a meeting on November 12 and 13. This ViewPoints briefly highlights member perspectives on these issues.