The SEC's proposed executive compensation rules have Hollywood up in arms:
The proposed regulation, under consideration by the Securities and Exchange Commission, would require a corporation to publish the salary details of as many as three nonexecutive employees whose total compensation exceeds that of any of its top five officers. Companies currently have to disclose only the pay of the chief executive officer and the next four highest-paid officers. The new rule, which the SEC is expected to decide on later this year, would apply to all listed companies but would likely have the most impact in industries such as media, financial services, technology and pharmaceuticals, in which star performers can earn more than CEOs.
... In the past, media companies have taken great pains to have their studio chiefs not classified as corporate officers because their salaries often came close and sometimes topped the salary of the CEO. It isn't unheard of for a top studio executive to earn well in excess of $5 million in salary and bonus.
If you think corporate compensation disclosure is a good thing, admittedly a debatable proposition, there's no good reason to limit such disclosure to officers. In some industries, of which Hollywood is the leading but not only example, there are key employees who don't technically meet the statutory definition of a corporate officer, but who are very highly paid and critical to the success or failure of the firm. Why then should be disclosure limited to statutory officers?
Note, by the way, that the rule likely will not apply to "talent," such as actors or directors. Those folks are usually independent contractors who are unlikely to be deemed employees for this purpose.
