Here’s the First Company to Ever Disclose CEO-to-Worker Pay Ratio While Citing the Dodd-Frank Act
by Scott Klinger, 11/17/2014
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 required companies to begin disclosing the pay ratio between CEOs and the median pay of company employees. Four years of struggle ensued, with many corporations arguing the disclosure would be costly if it could be done at all. The SEC has yet to issue a final rule, but is expected to soon, calling for disclosure to begin for all companies starting in 2016.
In the meantime, Noble Energy, a Texas-based oil and gas producer became the first public company to report its CEO-to-worker pay ratio citing the forthcoming requirements of Dodd-Frank. (Several companies have for many years published their CEO pay to worker pay ratio, including Whole Food Markets, MBIA, Northwestern Companies and the Bank of South Carolina, but none have so far pointed to Dodd-Frank as the impetus.)
In its pay disclosure, Noble Energy writes:
Our Chairman and CEO’s annual direct compensation for 2013 was $9,720,334 as reflected in the Summary Compensation Table. We estimate that the median of the annual direct compensation of all of our employees, excluding our Chairman and CEO was $114,376 for 2013. As a result, we estimate that our Chairman and CEO’s total annual direct compensation was approximately 85 times that of the median annual direct total direct compensation of all of our other employees.
See that wasn’t so hard. It is time for CEOs to stop obstructing the disclosure of pay ratios and start sharpening their pencils so that they too can follow the Texas energy company’s noble lead.