We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
INCOME INEQUALITY AND PAY RATIO DISCLOSURE: A MORAL CRITIQUE OF SECTION 953(B).
- Authors
Staihar, Jim
- Abstract
Congress passed a pay ratio disclosure rule in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Ac:). Under Section 953(b) of the Dodd-Frank Act, a company is required to disclose the ratio of the annual total compensation of its CEO to the median of the annual total compensation of all its employees.1 In 2015, five years after the passage of the Dodd-Frank Act, the Securities and Exchange Commission issued its final implementation of Section 953(b) among considerable controversy about the justification of this pay ratio provision2 Neither the text of Section 953(b) nor the legislative history surrounding its passage contains an explicit statement of any intended benefits of the rule. In this article, I explore a broad range of moral reasons that might count against inequalities within a company's pay schedule. The moral reasons I identify derive from the extensive literature on egalitarianism in moral and political philosophy. The importance of these egalitarian reasons indicates that Congress had a strong justification for passing a pay ratio disclosure rule as part of the Dodd-Frank Act. That said, I argue that Section 953(b) is ultimately unjustifiable and stands in need of revision because the relevant egalitarian reasons count in favor of an alternative pay ratio disclosure rule that is both more justifiable and readily available. Congress should amend Section 953(b) accordingly.
- Subjects
INCOME inequality; PAY-ratio disclosure (Executive compensation); DODD-Frank Wall Street Reform &; Consumer Protection Act
- Publication
University of Pennsylvania Journal of Business Law, 2017, Vol 19, Issue 2, p457
- ISSN
1945-2934
- Publication type
Article