A new federal rule first passed under the Dodd-Frank Act will require public companies to list their chief executives' total annual compensation as a ratio to their workers' median pay.
The 3-2 party line vote at the Securities & Exchange Commission comes five years after Congress approved Dodd-Frank. The vote today comes nearly two years after the SEC formally proposed the requirement.
Financial Services Committee Chairman Jeb Hensarling, R-Texas, along with Capital Markets and Government Sponsored Enterprises Subcommittee Chairman Scott Garrett, R-N.J., and Monetary Policy and Trade Subcommittee Chairman Bill Huizenga, R-Mich., wrote a letter to SEC Chair Mary Jo White encouraging her and the Commission not to prioritize the completion of this controversial rule ahead of other much-needed rules, including many within the bipartisan JOBS Act.
“Under the Obama economic strategy of which Dodd-Frank is a central pillar, our anemic recovery has created 12.1 million fewer jobs than the average recovery since World War II. For more than a year now, the share of able-bodied Americans in the labor force has hovered at the lowest level in nearly 40 years. Small business startups are at the lowest level in a generation. This is simply unacceptable,” Hensarling said Wednesday.
“That is why today’s 3-2 partisan vote is disappointing because it is the latest example of the SEC squandering its resources on rulemakings that do nothing to help small business startups and will instead harm U.S. companies and investors,” he said. Instead of focusing on rules that would protect investors or facilitate capital formation for small and medium-sized businesses, Dodd-Frank decided to mandate disclosure rules that burden every U.S. public company that cost the economy billions of dollars without any material benefit.”