Weekend Economists Down Under May 23-26, 2014

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43. Chamber Of Commerce Claims Calculating How Much More CEOs Make Than Their Workers Is ‘Egregious’

http://thinkprogress.org/economy/2014/05/23/3440984/chamber-ceo-pay-ratio/

This week, the Chamber of Commerce released a report claiming that a new requirement under the 2010 Dodd-Frank financial reform bill that corporations calculate and disclose the ratio of CEO pay to an average worker’s pay is “egregious.”

The report notes that the Securities and Exchange Commission, which has to issue the regulation, estimated that the new rule would require an average of just 190 extra hours of paperwork each year per company, costing an extra $18,000.

But the Chamber contends that different data that it gathered from surveying 118 companies, or 3.1 percent of covered businesses, show the costs would be higher. The companies said it would take an average of 952 hours each year to comply, costing them $185,600. Yet it also says that 13 companies reported it would cost them less than $10,000 and “a few” said it would cost almost nothing. The discrepancy, it says, is that large multinational companies may have many different payroll systems and therefore will take them longer to calculate what everyone is paid.

But these costs don’t have to be nearly so high. As Bartlett Naylor, financial policy advocate at Public Citizen, points out, the proposed rule would permit statistical sampling, which wouldn’t require corporations to collect all compensation data for every worker across the company. “The Chamber’s own data reveal that some companies can complete the calculation for $10,000, which is already an exaggeration,” he says in a press release. “A well-managed company should already know how much its employees make.”