U.S. Chamber Statement on SEC Pay Ratio Rule

Wednesday, August 5, 2015 - 11:30am

WASHINGTON D.C.—U.S. Chamber of Commerce Center for Capital Markets Competitiveness President and CEO David Hirschmann today issued the following statement in regards to the final pay ratio rule released by the Securities and Exchange Commission (SEC):

“Congress added this disclosure to Dodd-Frank as a favor to union lobbyists who misguidedly think it will help their organizing efforts. When disclosure is used to advance special interest agendas rather than provide investors with better information, it is a step in the wrong direction.  

“At best, pay ratio is a misleading, politically-inspired, and costly disclosure that fails to provide investors with useful, comparable data. For example, a domestic company might have a better pay ratio than a multinational company due to legal, currency or cost of living differences, creating a situation that is like trying to compare baseball to basketball stats when it’s a whole different ballgame.

“While the SEC and Congress have acknowledged that disclosures need to be modernized, this only exacerbates the problem and makes the public markets less attractive to investors and companies. This rule is more harmful than helpful, and we are disappointed that the SEC ignored suggestions for improvement. We will continue to review the rule and explore our options for how best to clean up the mess it has created.”

Since its inception in 2007, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.