Should companies be forced to reveal CEO pay ratios?
强制企业披露高管薪酬？

The Problem

The proposal in the Dodd-Frank bill that US companies should disclose the ratio of their chief executive’s pay package to a typical employee’s has led many companies to complain that it will be a logistical nightmare. Should companies be forced to reveal this ratio, and does it actually affect how well an organisation performs? The advice 1. The academic Wayne Guay Because transparent disclosure about US chief executive pay levels already exists, the proposed pay ratio simply provides coarse disclosure of wage levels for non-CEO employees. It is difficult to see how such information would assist shareholder decision-making. All can agree that some jobs pay higher wages than others, just as some raw materials or equipment cost businesses more than others. Once this is established, however, it is difficult to see how scaling one wage by another, or one inventory cost by another, provides a helpful benchmark for whether wages or inventory are overpriced or underpriced. How would one even begin to determine whether a CEO should be paid 5x, 50x or 500x the average employee wage? Would a 500x CEO managing a fast food chain be considered overpaid relative to a 50x CEO managing a software design company even if the two CEOs were paid the same amount? The writer is professor of accounting at the Wharton School 2. The PR consultant Paul Taaffe Transparency is becoming the new baseline for businesses. The pressure is coming not just from employees – it’s a focus for shareholder activism and a regular hot potato at annual meetings. A big challenge of complying with this proposal will be to define a “typical” employee. For global companies this will be even more difficult given the pay differential across markets. There may well be reputational benefits for companies who choose to explain the basis of senior level compensation. However, I find it hard to see how forcing publication of a seemingly simple but essentially flawed ratio would improve the quality of debate, or do anything but stoke envy and damage employee relations. The writer is global chief executive and chairman of Hill & Knowlton 3. Behavioural expert Steve Martin Behavioural scientists have a good understanding of the factors that influence people’s decisions. One of the most fundamental is the frame in which information is presented. The way in which things are compared can have a greater influence over how people react than the information itself. The key question to ask is: “What is the most appropriate comparison I can present that makes my proposal appear even more attractive?” Once identified, that is the information that you should always present first. So, while the ratio may not actually represent a qualitative assessment of the CEO’s value, it may go some way to positively influencing how the executive operates. The writer is co-author of ‘Yes: 50 Secrets from the Science of Persuasion’