SEC Creates Rule to Further Progressives' Wage Agenda
Nothing but class warfare disguised as helping the middle class.
At the very least, the new rule created by the Securities and Exchange Commission will be another hoop publicly traded companies must jump through. But it could also chill business, making companies unwilling to hire entry-level employees. In a party line vote Wednesday, the SEC voted 3-2 mandating that publicly traded companies disclose the ratio between what the companies’ CEO is paid versus what the average employee takes home every year. It’s a move that prompted the Wall Street Journal editorial board to label the SEC “The Warren Commission,” after Elizabeth Warren, as the progressive senator pressured it to pass the law ahead of other, more important reforms. The change does nothing to inform investors as to whether or not one company is preferable to another. It only fuels a certain type of political activism. “Only a small segment of shareholders, primarily unions, certain pension funds and social activists, are likely to use the pay ratio to drive their own narrowly tailored agendas,” said the Center on Executive Compensation in a statement. Sure, the struggling middle class is a worrying trend in the U.S. economy, but this isn’t a good way to deal with it. The rule the SEC created in the ‘90s requiring companies to publicly disclose how much they pay their CEOs has arguably done more to increase the wages of chief executives than lessen them.