Waging class warfare can get pretty tiresome for some Democrats… Which kinda explains why they have decided to make companies wage it on themselves. As part of the regulation requirements in Dodd-Frank, publicly traded companies will soon have to spend millions of dollars, and hundreds of thousands of man-hours, to officially report how rich their CEO is compared to rank and file employees. According to the Washington Free Beacon:
The provision is backed by labor unions like the AFL-CIO, which seeks to “shame companies into lowering CEO pay.” The price tag of the regulation is expected to be “substantial,” costing more than $72.7 million and over 500,000 hours to comply.
The “pay ratio disclosure rule” will mandate that publicly traded companies report how many times more their CEO makes than the average employee in their annual report. And why? Well… I guess because the millionaires who run unions like the AFL-CIO want to “shame” CEO’s into being a little less rich.
After all, the CEO to rank-and-file ratio isn’t exactly a useful tool for evaluating the profitability of a company, or the value of its product. Unlike reporting top executive compensation (which is already required), the number doesn’t even give prospective investors an insight into the fiscal responsibility of the company’s leadership… Really, it just tells you whether or not “company x” is run by good comrades, or capitalist pigs.
“It would take global companies months and thousands of hours to come up with a completely useless number,” wrote the National Association of Corporate Directors (NACD), commenting on the proposal.
Heck, even the SEC (the group of bureaucrats and unelected regulators who will be tasked with finalizing this rule) say there will be no real use for this information, outside of beefing up Elizabeth Warren’s 2016 talking points. (Okay… I may have paraphrased a little.)
But that kinda brings us to the bigger issue, don’t ya think? Since when did making “a ton” of money (for managing the direction, vision, and operation of a publicly traded company) become a sin? Correct me if I’m wrong, but don’t most of us expect the person who “runs things” to make a bit more than the 18 year old (part time) employee who gathers the shopping carts in the parking lot? It almost seems like there’s a pretty obvious reason for most pay disparities between CEOs and average employees: Running a multi-national restaurant chain tends to demand a substantially higher level of monetary compensation than shoveling French fries into a collapsible cardboard container.
The “Help Class Warfare Junkies Feed their Addiction” rule in Dodd-Frank (again – this is paraphrased) essentially requires businesses to spend millions of dollars so they can give the Bernie Sanders and Liz Warrens of the world a piece of useless data. In effect, it is designed to provide the progressive wing of the Democrat Party with some cute talking points, just in time for a Presidential election…
Of course, something tells me the class-warriors in the DNC won’t be in any rush to provide similar “context” to their wealth. I guess some animals are just more equal than others.