Compounding Our Pay Problems

untitled 2The pay ratios between CEOs and average employees are once again in the news. This is partly because proxy season always raises this issue and partly because there is a move in some circles to do away with the new pay ratio disclose rule that is part of Dodd-Frank. This year’s ratios will likely be bigger than last. The same will likely be true for most years in the foreseeable future. Here’s why.

The average annual increase for the average employee has been between 2.6% and 3.2% for several years. The use of equity compensation and other long-term compensation tools went down over at least the past decade. At the same time, executive base pay has increased between 5% and 8% most years over most of the past decade. During this period, the use of Continue reading

5 Predictions about CEO Pay Ratio

Its All About the Golden Ratio (2)On August 5, 2015 the SEC voted to approve a new rule on the disclosure of the ratio of CEO pay to that of the median employee. This rule was a requirement of the Dodd-Frank Law passed in 2010. The details of the rule and what companies must do to prepare for it are all over the internet. This article covers what we can expect as a result over the next several years. Continue reading