America’s biggest companies are about to tell the world for the first time how compensation for their chief executives compares with what they pay their rank-and-file workers.
The disclosure, a requirement of the postcrisis Dodd-Frank law, is causing trepidation among top executives and corporate boards, and for good reason: The pay ratio, which is calculated by dividing a CEO’s annual compensation by the median employee’s pay, is likely to serve as a new lightning rod in the debate over executive pay.
A survey of more than 350 companies conducted by compensation-data firm Equilar Inc. offers one of the first glimpses of the size and variation of CEO pay ratios and the underlying employee pay figures, giving businesses, investors and workers a sense of how practices measure up.
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