April 14, 2011

Should Executive Compensation be Public?

newsWhen you forget to hit the double-sided icon on the Xerox machine, that’s a waste of paper.  When grocery stores put a flier on every door in the neighborhood on a windy day, that’s a waste of paper.  When you print out the same driving instructions every holiday on how to get to your aunt’s house, that’s a waste of paper.  When a corporation needs to do some math to figure out how much their employees’ make, is that really a waste of paper?

Several corporations are lobbying that determining the median salary of their employees is a waste of paper.  They do not want to have to make public how CEO salaries compare with that of their average worker.  They also claim that it’s a difficult figure to calculate.

Last checked, median numbers are fun to calculate because you don’t even need to do long division.

“Publishing the ratio of pay won’t cure the problem of excessive executive compensation, nor did sponsors in Congress hold such aspirations,” said Bartlett Naylor, financial policy advocate in Public Citizen’s Congress Watch division and another report author. “But it could help determine whether the CEOs’ pay is appropriate.”

Various corporations are attempting to weaken the new Wall Street reform law.  For instance, four groups working to undermine a new executive pay rule before it is even proposed publicly spent more than $4.5 million on lobbying last year on a variety of issues and made $660,180 in campaign contributions, a new Public Citizen report reveals.

Recruiters are often focused on salaries.  What do you think?  Should corporations be required to report how top employee salaries compare to the average worker?

Read more news in Employee Compensation

Marie is a writer for Recruiter.com covering career advice, recruitment topics, and HR issues. She has an educational background in languages and literature as well as corporate experience in Human Resources.