“[W]e thank you for your work in drafting an effective rule implementing section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Given that three years have passed since the enactment of the law , we urge you to move quickly to put the final rule in place.”
During an initial consultation period, the SEC received more than 20,000 letters, overwhelmingly in favor of the pay-ratio requirement. Since the Commission issued its proposed rule in September, more than 116,000 individuals and organizations, including Americans for Financial Reform, have submitted letters urging the SEC to stand firm.
In the end, the Commission stood firm against industry resistance to a common-sense disclosure requirement. The SEC also correctly insisted that part-time and overseas workers be included in the calculation, consistent with the language and intent of the statute.
By eliminating an exemption for “performance-based” pay, this bill would cap the tax deductibility of executive compensation at $1 million, as a 1993 law only pretended to do.
Three years after Dodd-Frank, the Securities and Exchange Commission has yet to write a rule implementing “one of the simpler parts of a mammoth and complicated law.” The Washington Post explores the reasons.
AFR sent a letter to members of Congress opposing HR 1135, the “Burdensome Data Collection Relief Act.” This legislation would repeal Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires that companies report the ratio of CEO to median worker pay.
AFR joined more than twenty public interest groups in sending a letter to SEC Chairman Mary Jo White advocating for effective regulation of executive compensation.
“On Feb. 16, the U.S. House Financial Services Committee voted overwhelmingly to approve a bill that would exempt newly public companies from holding say-on-pay votes for five years. …Americans for Financial Reform (AFR), a coalition of consumer and investor groups that includes the AFL-CIO, has urged the Senate Banking Committee to reject the emerging company legislation. The coalition criticized the auditor attestation exemption and noted that say-on-pay votes have nothing to do with eliminating barriers to new IPOs.”
“A coalition of corporate organizations has asked the U.S. Securities and Exchange Commission to hold a roundtable before proposing rules to implement the CEO-employee pay ratio disclosure mandate of Section 953(b) of the Dodd-Frank Act. …In response, the Americans for Financial Reform (AFR), a group that includes the AFL-CIO and other supporters of Section 953(b), argues that the business coalition’s request for a roundtable is an attempt ‘to stifle the rule, not to enhance the rulemaking process.’”
AFR sent a letter to SEC Chairman, Mary Schapiro indicating our objection to the SEC’s decision to delay implementation of Section IX of Dodd-Frank. This will result in the delay of corporate governance and executive compensation reforms necessary to the public interest.