Disclose More About Employee Pay?

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Should banks be compelled to disclose more information about how they pay employees beyond the executive suite?

The Securities and Exchange Commission is reportedly crafting a formal proposal to require greater transparency about compensation packages - not just for senior executives, but for an unspecified broader group of highly paid employees.

According to The Wall Street Journal, the agency won't demand hard numbers, as it tried to do in 2006 but got shot down. Instead, the paper says the SEC is moving to require disclosure "in more-general terms how lower-ranking employees are paid, especially when it affects the company's overall risk management." Companies also would have to explain the "overall design" of pay structures, and how compensation is tied to long-run performance of employees.

Is this a much-needed move toward greater transparency? Or is it the camel's nose under the tend - a step toward shaming bankers into feeling and behaving more like government bureaucrats, whose pay is determined by a published schedule of grade levels?

Would such rules accelerate the already evident movement of top talent from U.S.-based financial institutions to foreign banks that aren't subject to similar restrictions?

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