Granted the SEC has to adopt a rule implementing the asinine requirement in Dodd-Frank Section 953(b) re disclosure of the ratio of CEO pay to that of a company's average workers, but I still want to praise Commissioner Gallagher for telling it like it is (do we still say that?):
Today, the Commission will vote on proposed rules to implement yet another Dodd-Frank mandate having nothing to do with the SEC’s mission and everything to do with the politics of not letting a serious crisis go to waste.
The pay ratio computation that the proposed rules would require is sure to cost a lot and teach very little. Its only conceivable purpose is to name and, presumably in the view of its proponents, shame U.S. issuers and their executives. This political wish-list mandate represents another page of the Dodd-Frank playbook for special interest groups who seem intent on turning the notion of materiality-based disclosure on its head.
There are no – count them, zero – benefits that our staff have been able to discern. As the proposal explains, “[T]he lack of a specific market failure identified as motivating the enactment of this provision poses significant challenges in quantifying potential economic benefits, if any, from the pay ratio disclosure[.]”
Amen. Damn straight. And so on. Go read the whole thing, which includes an argument that while the SEC had to act it did not have to act now, which I found wholly persuasive.
The only thing missing from his excellent analysis was a citation to the fact that I discuss this asinine provision in the chapter on executive compensation in:
