Hoffa: The SEC Took Its Time, But Got It Right
(WASHINGTON) The International Brotherhood of Teamsters today applauded the Securities and Exchange Commission (SEC) announcement of a new proposed rule requiring corporations to disclose the ratio between chief executive and worker pay.
The disclosure will provide investors much needed transparency about how companies allocate resources – whether into the future of the business or merely into the pockets of top executives. Lopsided CEO to worker pay ratios create long-term problems for investors by corrupting incentive systems for top executives and by, as studies show, destroying worker morale and ultimately lowering productivity.
“CEO pay keeps going up and worker pay keeps going down,” said Teamsters General President Jim Hoffa. “This is a dirty secret that corporate CEOs don’t want exposed, and the SEC did the right thing by proposing this rule.”
The 2010 Dodd-Frank financial reform law required the SEC to issue the rule on CEO-to-median worker-pay ratio disclosure.
Run-away executive pay has become a serious concern for investors. McKesson’s CEO pay package (which has averaged around $50 million a year) was rejected by a 78 percent majority vote of investors despite the company’s strong stock performance. The pharmaceutical wholesaler, ranked #14 on the Fortune 500, pays its CEO about 313 times the average worker, many of whom cannot even afford to participate in the health care company’s own health care plan.
“The excessive compensation provided to some CEOs has perverted the ‘pay for performance’ accountability that investors demand,” said Teamsters General Secretary-Treasurer Ken Hall. “Over the long-term, these abusive pay packages can undermine morale and performance throughout the company.”
Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.