ANN CROTTY: It’s hard to keep big business pay packets in check
A US body has been trying since the 1930s to rein in runaway executive remuneration
Fair dues to the US Securities & Exchange Commission (SEC): it doesn’t give up. It’s been trying to restrain levels of executive remuneration since the 1930s and despite this challenge slipping further from its grasp — as measured by absolute and relative levels of executive pay — it persists.
But it’s difficult to be optimistic about its latest move on pay, which comes into effect in mid-October. It’s the “pay vs performance” rule which, according to SEC chair Gary Gensler, will provide clear disclosure to investors on the relationship between companies’ executive compensation actually paid and financial performance. It is a more vigorous version of a regulation introduced in the UK a few years ago...
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