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Disclose More About Employee Pay?

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?

AUTHOReFinancialCareers News Insider Comment
  • sp
    15 June 2009

    Alert! Buy aluminum futures now! ....price is about to skyrocket due to massive metal foil purchases by people like the above commenters, to build their hats with.

  • NK
    15 June 2009

    The reason the press doesnt focus on monopolies is because these companies own the press. U can make newspapers wrire what u want by paying them or by threatening to pull your advertising

  • em
    13 June 2009

    I totally agree that pay information should be known to employees.
    Corporations make us slaves by working us to death, etc. and then
    we have little control of how much we make. Real inflation for food, energy has skyrocketed and we have little ability to compensate for this.
    What free market. Corporations control our lives. They've consolitated so much that the old free market of many, many companies is a hoax,
    history. Each company is worst than the next. There are so many monopolies or almost monopolies and the press doesn't focus of this.
    It's ruining capitalism and freedom in America

  • Da
    4 June 2009

    Why just banks? Why not every company that receives even 1 dollar from the government be it in the form of loans, contracts or bailouts. Why the secrecy with pay anyway? Everyone should know what everyone else is getting paid. Secrecy only benefits employers who want to screw over their employees.

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