UCF Calls for Transparency in Pay Differences
Faith-based investors speak out on risks of a change in SEC’s planned disclosure of employee-to-CEO pay ratio
Led by our ecumenical partners, United Church Funds is one of a group of seven faith-based investment organizations in urging the Securities and Exchange Commission to keep a rule requiring businesses to disclose the CEO/median worker pay ratio. The rule came into effect January 2017. The SEC is now reevaluating the disclosure, however, due to pressure from the new administration to eliminate regulations that are perceived to cause an undue reporting burden to companies.
The signatories believe the CEO/median worker pay ratio provides valuable information about a company’s health – and is an important measure of income inequality in society. Disclosing the CEO/median worker pay ratio will help develop a more fair and efficient economy be fairer and more efficient, outweighing any negatives.
“We need to insert some sanity into the way Americans are paid. No person should make over 300 times over a coworker’s salary. The only way to start the process of changing this dynamic is to have the information. The SEC should stand on the side of transparency always, but especially with something as foundational to society as what we are paid for the work we do,” said Katie McCloskey, Director of Social Responsibility for United Church Funds.
“Faith-based investors serve not only as financial fiduciaries, but also stewards of the intersection of real-world investment practices with the religious values and teachings of their communities,” said Mark Regier, Vice President of Stewardship Investing for Praxis Mutual Funds, a faith-based, socially responsible family of mutual funds, designed to help people integrate their faith and finances.
“The pay ratio rule is about common sense transparency to improve corporate governance and ultimately company performance,” said Interfaith Center for Corporate Responsibility CEO Josh Zinner. “It is also fundamentally about companies reflecting on and reckoning with the vast, widening gap between CEO and worker pay and how that contributes to income inequality in our society.”