US SIF Commends New Pay Ratio Disclosure Rule

US SIF issued a statement in response to the new executive compensation disclosure rule issued by the SEC as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. 
Rule mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act
WASHINGTON, D.C. (August 5, 2015)-US SIF: The Forum for Sustainable and Responsible Investment issued this statement today in response to the new executive compensation disclosure rule issued by the Securities and Exchange Commission (SEC) as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the rule, publicly traded companies would be mandated to disclose, beginning in 2017:
  • The median of the annual total compensation of all employees except the CEO.
  • The annual total compensation of the CEO.
  • The ratio of the two amounts.
Lisa Woll, CEO of US SIF said:
“We applaud the CEO-to-worker pay ratio disclosure rule.  US SIF has urged the SEC to enact this rule since the Dodd-Frank Act became law five years ago.   We thank SEC Chair Mary Jo White and Commissioners Luis Aguilar and Kara Stein for supporting this rule, as well as the SEC staff for their hard work in finalizing it.
Disclosure of the CEO-to-worker pay ratio is a key measure to ensure sound corporate governance. The new rule will foster corporate accountabilityand provide investors with material information to better assess investment risks.  Responsible investors and many members of the general public have expressed deep concern over escalating executive pay during the last several years as ordinary employees' incomes have stagnated.  High pay disparities within companies can damage employee morale and productivity and threaten the companies' long-term performance.  The promulgation of this rule has therefore been a high priority for US SIF.
We believe that the rule strikes an appropriate balance between providing useful information to investors and providing issuers with flexibility in its implementation. While we are disappointed the smaller reporting companies are excluded from the rule and that issuers have the ability to exclude up to 5 percent of non-US employees when determining the median employee, we are pleased that the SEC's rule applies to US and non-US employees, as well as full-time, part-time, seasonal and temporary workers employed by the company or any of its consolidated subsidiaries, with some exceptions.  In a global economy with increased outsourcing, comprehensive information about a company's pay and employment practices is material to investors.”

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About US SIF
US SIF:  The Forum for Sustainable and Responsible Investment ( is the US membership association for professionals, firms, institutions and organizations engaged in sustainable, responsible and impact investing.  US SIF and its members seek to use investment capital to help build a sustainable and equitable economy. They therefore advance investment practices that consider environmental, social and corporate governance criteria in addition to standard financial indicators to generate long-term competitive financial returns and positive societal impact. US SIF's 300 members collectively represent more than $2 trillion in assets under management. They include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, community investing institutions, non-profit associations, and pension funds, foundations, and other asset owners.