Mary Jo White & co. are struggling mightily to cobble together the pay-ratio rule required by the Dodd-Frank law four years ago. The SEC chief hopes and expects, she said a few months ago, to finish it by the end of the year.
What is the pay-ratio rule, you might ask? On its face, it seems like a rule that asks companies to first have Excel determine their median employee salary, then to copy that figure and paste it in a regulatory filing, which is completed by copying and pasting the CEO’s salary in an adjacent box. Perhaps the SEC will even require companies to create an easy to quote-and-understand ratio, saying exactly how many hundreds of thousands of dollars the CEO earns for each dollar the median employee earns.
Jeb Hensarling, Scott Garrett and Bill Huizenga are Republicans, so they don’t like the idea of forcing companies to disclose anything, let alone something so embarrassing as the above. So they have a suggestion for MJW:
“Prioritizing completion of the pay ratio rule will continue the SEC’s practice of misallocating limited resources to non-essential projects rather than completing rulemakings and other responsibilities central to fulfilling its statutory mission,” the lawmakers wrote in a letter Monday to SEC Chairman Mary Jo White….
The lawmakers, who asked for a detailed description of the funds and man-hours spent on the pay-ratio rule, said the SEC need not act swiftly on the rule because the Dodd-Frank law doesn’t impose a specific deadline for its completion, unlike provisions of the JOBS Act. Republican lawmakers have repeatedly prodded the SEC to complete remaining provisions of that 2012 law, including unfinished “crowdfunding” rules to allow startups and entrepreneurs to reach larger numbers of potential investors through investment websites.