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One-Half of Members Favor CEO Compensation Transparency

This week’s Sentiment Survey special question asked AAII members what they think about the new requirement for companies to disclose how CEO compensation compares to the median compensation for all employees. Half of all respondents were in favor of the rule. Many favor the increased level of transparency, saying shareholders have a right to the information. Several others brought up the issue of excessive CEO compensation. About 4% of all respondents used the word “great” to describe the new requirement.

Not everyone was in favor of the new rule. Slightly more than a quarter of all respondents (26%) disfavor the new rule or think it’s a bad idea. Common themes in their responses were that the rule amounts to government interference, it’s unnecessary or it is politically motivated. An additional 13% of respondents said the rule won’t lead to any significant changes in compensation.

Here is a sampling of the responses:

  • “I think this is great. CEO compensation for a lot of companies has gotten out of hand.”
  • “Excellent idea! This can be another metric for CEO accountability to shareholders.”
  • “The more transparency the better. I like the rule.”
  • “Do not like, it is a politically correct activity and not something to protect investors.”
  • “I see no value in it. Regulators are again overstepping their authority.”
  • “I’m not sure what effect it will have. We already know that many CEOs are overpaid.”
 

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