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CEO-To-Worker Pay Ratio Disclosure

WHEREAS:

            The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires companies to disclose their CEO-to-median-worker pay ratio; and

WHEREAS:

            In 2013 the CEO to worker pay ratio was 331:1 and the CEO to minimum wage worker pay ratio was 774:1; and

WHEREAS:

            In recent decades, income inequality has grown as corporate CEOs have been taking a greater share of the economic pie while wages have stagnated and unemployment remains high; and

WHEREAS:

            High pay disparities inside a company can hurt employee morale and productivity and have a negative impact on a company’s overall performance; and

WHEREAS:

            Management consultant Peter Drucker believed the ratio should be not more than 25 times the average worker and warned that excessive CEO pay ratios destroy mutual trust between groups that have to live together and work together; and

WHEREAS:

            Reasonable CEO-to-worker pay ratios send a positive message to the workforce that the contributions of all employees are important to running a successful company; and

WHEREAS:

            Companies with higher levels of employee morale are more successful; and

WHEREAS:

            Disclosure of the median employee pay will help investors better understand companies’ overall compensation approach to developing their human capital; and

WHEREAS:

            Investors will be able to use the pay ratio in deciding how to vote on management executive compensation proposals.

THEREFORE BE IT RESOLVED:

            That AFSCME commends the SEC for releasing a proposed rule requiring companies to disclose the ratio of total compensation between CEOs and the median pay of employees; and

BE IT FURTHER RESOLVED:

            AFSCME urges the SEC to adopt a final rule so companies are required to disclose the ratio between CEO and median employee pay and investors can use this information; and

BE IT FINALLY RESOLVED:

            That AFSCME will work with its allies, including then AFL-CIO, Americans for Financial Reform, the Council of Institutional Investors, the Interfaith Center for Corporate Responsibility, the Institute for Policy Studies and others, to pursue this goal.

 

SUBMITTED BY:
Joanne Cooke, President and Delegate
AFSCME Local 72, Council 93
Massachusetts

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