Months after announcing a slate of bills to “strengthen the rights and protections of workers”, House Democrats, led by Rep. Nydia Velázquez (D-NY), introduced new legislation - The Greater Accountability in Pay Act of 2019 - which would require companies to disclose a comparison of the year-over-year change in executive compensation compared to the annual changes in median employee compensation.
“Pay Raise” Ratio – The logical next step building on the pay ratio disclosure. Although the rhetoric from the pay ratio disclosure has been largely muted, the disclosure is serving its purpose as a launching pad for additional public company “transparency” requests within the scope of a larger push on human capital metrics. Several media outlets this year focused on the change in median CEO compensation to median employee compensation.
Comparing median employee pay raises to executive pay raises would give a sharp rhetorical point. With income inequality a cornerstone part of the Democratic Presidential primary, Rep. Velázquez’s bill would require companies to disclose:
- The percentage increase in the median pay of a company’s executive officers;
- The percentage increase in the median pay of a company’s employees; and
- A comparison of the two figures to each other as well as to the percentage change over the same period in the Consumer Price Index for All Urban Consumers.
House Financial Services Committee making worker pay gap a major priority. The bill’s official introduction coincides with announcements from Rep. Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee that the Committee will continue asking companies “hard-hitting questions on issues including  alarming CEO pay ratios despite making record profits.”