How much more do CEOs make than their employees?

We'll soon find out. Here's why.
Written by Tyler Falk, Contributor

It's no secret that CEOs of big companies in the United States make significantly more than the average worker. Last year CEOs from the top 350 U.S. firms made 273-times more than the average American worker. But how much more CEOs are paid compared to their employees can be less clear.

That's about to change.

The U.S. Securities and Exchange Commission voted 3-2 yesterday to propose a rule that would require companies to reveal the wage gap between a company's chief executive officer and the median annual compensation of its workers, Reuters reports.

The SEC's CEO pay ratio rule is championed by unions and labor advocates who say the disclosures will help investors identify whether a company's compensation model is too top-heavy.

But companies and business organizations such as the U.S. Chamber of Commerce, as well as, the Center on Executive Compensation, which represents human resources executives, have vehemently opposed the measure, saying it is too costly to compile the data and will not be useful for investors.

And for frustrated low-wage workers, who continue to push for higher compensation, the new rule could provide more data to boost their case.

The SEC was mandated to draft the rule by the 2010 Dodd-Frank Wall Street reform law. The proposed rule will now be released for public comment.

Read more: Reuters

Photo: Flickr/zen Sutherland

This post was originally published on Smartplanet.com

Editorial standards