Some companies are concerned that meeting expected reporting and HR compliance requirements from the Securities and Exchange Commission (SEC) will be a waste of resources and difficult to execute, Human Resource Executive Online (HREO) reports.
The SEC is planning to issue rules that would require publicly traded employers to calculate the ratio of median employee pay to CEO compensation in accordance with a mandate under the Dodd-Frank Act.
The Center on Executive Compensation in Washington weighed in on the question in a recent letter to the federal agency, saying a proposed statistical sampling approach would require companies to devote significant time and resources to compliance. According to a study from the group, more than 80 percent of companies surveyed would have difficulty collecting the data.
Most indicated they would be forced to calculate some of the information manually, while half said it would take a minimum of three months to arrive at a ratio. Companies with international operations might find it particularly difficult due to differing compensation structures.
Experts question the accuracy of the requested data under proposed criteria and rules, noting many companies lack the internal expertise to assemble and organize the requested data. One told HREO that the amount to be spent on compliance could significantly slow economic growth by diverting funds from business expansion, creation and development.
