WASHINGTON – After busting several self-imposed deadlines, the Securities and Exchange Commission plans to roll out a plan Wednesday that would require companies to disclose how much more their chief executives are paid than their other employees.
The SEC has been struggling with the initiative since 2010, when it was tucked into a massive financial overhaul law in response to public outrage about excessive executive pay. Earlier attempts to get the plan off the ground faltered after fierce opposition from corporate lobbyists, who cast the mandate as overly burdensome.
On Wednesday, the SEC is scheduled to unveil how it plans to carry out the law.
The rule will require all public companies to disclose their chief executives’ total compensation, the median compensation of all other employees, and the ratio between the two. Congress inserted the 18-line mandate into the 2,300-page law, known as the Dodd-Frank Act. But the law left it up to the SEC to decide on the logistics.
Within six months of Dodd-Frank’s passage, the SEC circulated a plan internally outlining how it would tackle the mandate. But scores of companies — including IBM, McDonald’s, AT&T and the New York Stock Exchange — urged the agency to slow down.