We're starting to hear a lot more about Section 953(b) of the Dodd-Frank Act, which requires public companies to disclose in proxy statements the ratio of the median pay of all employees to the total pay of the CEO. The goal was to make pay information more transparent and thus hold compensation committees more accountable to investors and employees. But more companies are starting to take issue with this rule. The big issue seems to be the logistical burden. One lobbyist group notes some relevant facts:

• A company that employs 108,000 people in 52 countries has over 100 vendors that maintain its 115 different pay systems.
• A company that employs 137,000 employees in 68 countries maintains over 1,000 different pay systems.
• A company that employs 42,000 individuals in 60 countries has 15 different pay systems.
• A company that has 360,000 employees globally in 19 countries has more than 10 different pay systems.

Supporters of the requirement say the logistical argument is a smokescreen. A Consumer Federation of America executive told Bloomberg that companies are overstating the difficulties to avoid inflaming activists who think corporate pay is out of control.

Companies perhaps have reason to fear they will be embarrassed. The ratio of CEO pay to the average worker hit 263 to 1 in 2009, according to the Institute for Policy Studies. But even if the ratio is high, it may be eminently tenable. Yet it will be incumbent for the company to add the appropriate commentary.

For more:
- here's the Bloomberg article

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