Finance

Bernie Sanders, Menendez ‘troubled’ by delay of CEO pay rule

Victoria Sarno Jordan

The Securities and Exchange Commission (SEC) is coming under scrutiny from Senate Democrats like Bob Menendez (N.J.), as well as Sen. Bernie Sanders (I-Vt.), for delaying a Dodd-Frank rule requiring a company’s top executive to reveal how much money they make in comparison to their employees.

The CEO-to-worker pay disclosure rule was a key provision of the Obama administration’s efforts to clean up Wall Street.

The SEC passed the rule in August 2015, and it was scheduled to go into effect this year. But acting Chairman Michael Piwowar, a Republican, delayed the rule in February, noting companies encountered “unanticipated compliance difficulties.”

In a letter to Piwowar sent Tuesday, Sanders and eight Senate Democrats said they are “extremely troubled” by the recent delay and accused the SEC’s acting chairman of attempting to “discredit the rule and generate momentum to repeal” it.

{mosads}They pointed out that CEOs at the nation’s largest companies make an average of “$335 dollars for every dollar earned by a typical employee.”

“Pay ratio disclosure helps investors evaluate the relative value a CEO creates, which facilitates better checks and balances against insiders paying themselves runaway compensation,” the senators wrote.

“Similarly, when a CEO asks for a raise while giving other employees a pay cut, investors should have this information,” they added.

Sanders made wages and income inequality a key issue last year during his presidential campaign.

The Senate Democrats who signed the letter include Menendez, who pushed for the CEO pay disclosure provision to be included in the Dodd-Frank financial reform law, Jack Reed (R.I.), Elizabeth Warren (Mass.), Cory Booker (N.J.), Dick Durbin (Ill.), Chris Van Hollen (Md.), Jeff Merkley (Ore.) and Al Franken (Minn.).

Tags Al Franken Bernie Sanders Bob Menendez Dick Durbin Elizabeth Warren Jack Reed Jeff Merkley
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