Legislative U-turn on US pay ratio disclosure – WorldatWork comment

A newly-introduced requirement on US firms to disclose internal pay ratios between chief executives and less senior staff looks set to be reversed. Members of the House Financial Services Committee are considering a new Burdensome Data Collection Relief Act (HR414), which will repeal recently finalised Securities and Exchange Commission rules on pay ratio disclosure.

WorldatWork, the US-based HR and reward association, strongly supports repeal, and led a long campaign to resist the original SEC rules.

Cara Woodson Welch, WorldatWork’s vice president of external affairs and practice leadership said:

‘Advancing this legislation [HR414] and relieving companies from the disclosure requirements which have now been finalised by the SEC is sorely needed. Now that the rules are final, compensation and executive compensation practitioners are faced with the daunting task of trying to identify their median employee in order to comply with the CEO pay ratio rules. This process will be extraordinarily expensive, time consuming and burdensome for companies and will fail to result in any meaningful benefit for shareholders and potential investors.’