Disclosures Show Median Pay at Public Companies Higher Than Thought

Disclosures Show Median Pay at Public Companies Higher Than Thought

In the aftermath of the financial crisis in 2010 Congress enacted a law requiring public companies to identify the compensation of their median-paid employee, compare that to the CEO as a ratio, and disclose it each year. As noted by the SEC in enacting rules to implement the legislation, Congress provided no rationale for the rule, although presumably it was intended to highlight perceived inequities between executive and average worker pay. Even more importantly, it required companies to disclose for the first time, not what executives were making, but what the median worker was paid.