November 18, 2013
Dear Securities and Exchange Commission:
I am an investor in publicly traded companies through my retirement plan and personal savings.
I strongly support the SEC’s proposal requiring companies to disclose the CEO-to-median worker pay ratio, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Pay ratio disclosure will help investors evaluate CEO pay levels when voting on executive compensation matters. The ratio of the CEO-to-worker pay is a valuable metric for investors, because it places CEO pay levels into a broader perspective.
For example, investors may use pay ratios as a factor when casting say-on-pay votes. Pay ratio disclosure also will help investors better understand their company’s overall compensation for all employees.
High CEO-to-worker pay ratios can have a negative impact on employee morale and productivity. Disclosure of the pay ratios will help the capital markets better allocate capital to those companies that invest in their workforces.
I know there are those opposed to this increase in transparency. However, it seems to me that their primary arguments are wrong and ill-conceived. After all, if, as these opponents maintain, the very high compensation of CEOs is justified by their value added, then there should be no hesitancy to disclose. What, in fact I think we are seeing from opponents of disclosure, is the implicit recognition that these very high compensation levels are not, in fact, justified. All the more reason for disclosure.
Sincerely,
William Barclay
Oak Park, IL