{"id":18899,"date":"2013-09-20T11:45:07","date_gmt":"2013-09-20T15:45:07","guid":{"rendered":"http:\/\/cfif.org\/v\/freedom_line_blog\/?p=18899"},"modified":"2013-09-20T11:46:13","modified_gmt":"2013-09-20T15:46:13","slug":"federal-regulators-make-move-to-micromanage-company-pay","status":"publish","type":"post","link":"https:\/\/cfif.org\/v\/freedom_line_blog\/18899\/federal-regulators-make-move-to-micromanage-company-pay\/","title":{"rendered":"Federal Regulators Make Move to Micromanage Company Pay"},"content":{"rendered":"

Last week, we highlighted the latest in a long line of Dodd-Frank debacles<\/a>.\u00a0 Specifically, a federal court unceremoniously vacated a regulation forcing U.S. energy companies working abroad to disclose sensitive proprietary information to foreign competitors who aren\u2019t subject to the same rule.\u00a0 As we noted, federal bureaucrats were essentially trying to force domestic companies to surrender their playbooks to overseas rivals in the name of worldwide social engineering.<\/p>\n

This week, we\u2019re witnessing yet another Dodd-Frank infamy.<\/p>\n

On Wednesday, a sharply divided Securities and Exchange Commission (SEC) proposed a controversial regulation<\/a> that would require companies to tediously calculate compensation ratios between chief executives and employees for public scrutiny.\u00a0 Keep in mind that public companies are already required to disclose compensation of top executives, so the proposed new rule won\u2019t provide any useful information about a given company\u2019s financial stability.\u00a0 Rather, it is nothing more than a sop to activists who obsess over distribution of wealth and who seek to pressure businesses and executives.<\/p>\n

To what end? \u00a0What business is it of the federal government how private companies choose to compensate every single one of their employees?\u00a0 Why should companies\u2019 time and resources be wastefully diverted to calculating ratios simply to please Washington, D.C. bureaucrats?\u00a0 How will this help \u201cprotect\u201d investors?\u00a0 The simple answer is that it won\u2019t.\u00a0 Instead, it\u2019s a provision sought by anti-corporate activists to foment discord and wage class warfare.<\/p>\n

Moreover, the proposed rule may drive subject companies to shift even more workers overseas rather than here in the U.S., since foreign employees may be excluded from the burdensome calculations.\u00a0 The proposed rule will also incentivize companies to remain or become private, rather than public, in order to escape these pointless burdens.\u00a0 In turn, that would only serve to punish middle-class investors who don\u2019t possess the wealth to participate in private investment.<\/p>\n

While the SEC\u2019s proposed pay ratio disclosure rule has yet to be implemented, the issue of executive compensation has also surfaced in the ongoing American Airlines bankruptcy.\u00a0 This week, in U.S. Bankruptcy Court, Judge Sean Lane rejected<\/a> the compensation package American Airlines\u2019 creditors had approved for the airline\u2019s CEO Tom Horton.\u00a0 Largely due to the work of Horton and his management team, American\u2019s performance in bankruptcy has exceeded all expectations \u2014 the company has experienced an almost total turnaround<\/a>.\u00a0 Furthermore, Horton\u2019s compensation package is in line with industry standards.\u00a0 Executives whose airlines fared far worse in bankruptcy than American received their compensation packages with little to no opposition.<\/p>\n

An individual\u2019s compensation at a corporation is a matter that should be decided by its leadership, board, and investors. \u00a0The government has no business intervening and micromanaging company pay, whether at American Airlines or all of the other U.S. public companies now moving within its sights.<\/p>\n","protected":false},"excerpt":{"rendered":"

Last week, we highlighted the latest in a long line of Dodd-Frank debacles.\u00a0 Specifically, a federal court unceremoniously vacated a regulation forcing U.S. energy companies working abroad to disclose sensitive proprietary information to foreign competitors who aren\u2019t subject to the same rule.\u00a0 As we noted, federal bureaucrats were essentially trying to force domestic companies to […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3524,2895,4276,1163],"class_list":["post-18899","post","type-post","status-publish","format-standard","hentry","category-posts","tag-american-airlines","tag-dodd-frank","tag-pay-ratio","tag-sec"],"_links":{"self":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/18899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/comments?post=18899"}],"version-history":[{"count":6,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/18899\/revisions"}],"predecessor-version":[{"id":18908,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/18899\/revisions\/18908"}],"wp:attachment":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/media?parent=18899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/categories?post=18899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/tags?post=18899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}