Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

The CEO Pay Ratio Rule Is a Failed Experiment: Michelle Leder

May 26, 2022, 10:00 AM

Back in 2017, a new rule aimed at exposing the excesses of corporate America went into effect: Every year, most publicly traded companies would have to disclose a CEO pay ratio, comparing the compensation of the chief executive to that of the median employee.

Having spent the subsequent five years trying to make sense of these disclosures, I think it’s time to call the rule a failed experiment and scrap it.

I don’t say this lightly. I had high hopes for the requirement: As recently as last year, I suggested that it might yet embarrass companies into addressing pay inequality. ...