« Asked and Answered * Decoupling Performance Reviews and Compensation | Main | What Do Dutch Windows Have To Do With Transparency? »

08/12/2015

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Great advice, Margaret, as always! Hope all the compensation pros share this article with their C-suite.

This will be interesting to see how it all plays out as there are many variables that will create an apples to bananas comparison. The workforce differences between industries will make an interesting comparison. Even within an industry different workforce strategies will make it difficult to compare.

If this does become a decisive metric will it lead some companies to outsource lower level roles to improve their ratios? What other unintended course of action could this metric lead to? Will this give companies with lower ratios the green light to raise theirs? Does the average just become the acceptable norm and as it rises so does what's acceptable?

How do you compare two companies in the same industry with the same avg pay when one is twice the size as the other? What about the current differences in pay based on scale of company, does this go away?

Am I missing something here of is this just as likely to be all smoke and no fire because there are too many reasons why companies can deviate from the norm?

Wow, Trevor! These things tend to be less apocalyptic and more everyday by the time they actually come about. Especially if companies take the interim to put some real thought (rather than emotions) into it. We'll have to see.

As Elvis Costello so nicely put it: "I used to be disgusted, now I try to be amused".

By the SEC's own admission, this regulation addresses no known market failure, provides no useful information to investors, cannot be be used for cross organizational comparisons, will almost certainly lead to perverse and unintended consequences, and will result in a deadweight loss to the economy of some 1.3 billion dollars in year 1, and 700+ million dollars per year thereafter.

On the other hand, I'm sure it will provide a sinecure for more than a few readers of this blog.

Tony --- maybe I've missed something. Where did you get the $1.3B and $700M numbers?

It's the cost of complying with the regulation, and you'll find it buried deeply in the 290+ pages of the notice of final rule.
http://www.sec.gov/rules/final/2015/33-9877.pdf

Tony, Compensation Café does not condone hostility to our readers. I am sure there are many who have feelings about this regulation and also have a job to do. We should respect our colleagues and their responsibilities. They are us.

Margaret, my hostility is entirely toward the regulation, and not in any way whatsoever to Compensation Cafe readers.

In retrospect, I obviously should have appended (sarc) and/or (irony) to my closing remark (for that was indeed the underlying intent).

I sincerely apologize to anyone who might have been offended by my failure to do so.

The comments to this entry are closed.