Friends Fiduciary joined with over 100 institutional and faith-based investors representing over $3 trillion in assets under management to submit comment letters to the SEC asking Acting Chairman Michael Piwowar to implement the pay ratio disclosure provision passed under Dodd-Frank. Chairman Piwowar asked for comments on a potential delay of the rule in February 2017, one of many attempts to weaken disclosures required by the 2010 Dodd-Frank Wall Street reform law.
The pay-ratio disclosure rule would require public companies to release “the ratio of the compensation of its CEO to the median compensation of its employees.” Investors expressed support for the pay-ratio disclosure rule, emphasizing that it allows investors to make more informed voting decisions on compensation decisions in company proxies. Further, such information is difficult for investors to find, and provides material information relating to human capital management, employee morale, and adherence to industry standards.
Friends Fiduciary believes that transparency around the ratio of CEO to worker pay is important because it would provide investors with material information needed to make both investment and voting decisions.