This week, in a hearing titled “A Review of Proposals to Strengthen the Rights and Protections for Workers,” House Financial Services Capital Markets Subcommittee House Democrats unveiled a set of draft partisan disclosure bills designed to deliver clear messages, including a mandated disclosure of employee outsourcing, human capital management, buybacks, and a “pay raise ratio.”
Four separate bills were discussed during the hearing:
- The Outsourcing Accountability Act, sponsored by Rep. Cindy Axne (D-IA), requires public companies to disclose the number of employees in each state and foreign countries as well as the “percentage increase or decrease” in the numbers of employees in each state.
- Human Capital Management Disclosure Requirement, also sponsored by Rep. Axne, requires the SEC to implement the 2017 rulemaking petition by the Human Capital Management Coalition, led by the UAW Benefits Trust, which sought a variety of human capital management disclosures including data on diversity, workforce skills, culture, health and safety.
- The SEC Buybacks Report would require the SEC to study stock buyback practices, including "incidents where the practice may be misused to enhance executives’ stock options"; report the results to Congress; and implement changes to SEC buybacks rules within a year of the report.
- The Greater Accountability in Pay Act of 2019, sponsored by Rep. Dean Phillips (D-MN), would require public companies to compare the percentage increase in CEO pay and median employee pay, as well a comparison of the respective increases to inflation.
During the hearing, there were a number of notable comments from the panelists and members of Congress:
- Representative Sherman (D-CA) called for the application of every bill introduced to all companies, private and public, with revenues exceeding $100 million or more. “We’re not the SEC where our powers are limited to public companies,” Mr. Sherman noted when discussing his idea.
- The AFL-CIO's Heather Slavkin-Corzo voiced a very strong theme of the hearing during her opening remarks, calling worker representation on boards “the single most important” thing which would be done to fix CEO pay and help worker pay.
- Representative Axne (D-IA) not only introduced the outsourcing and human capital management bills, but she has focused on clawbacks and pay for performance in a past hearing, reinforcing her heavy focus on SEC issues and disclosure.
Outlook: While the highly partisan nature of the bills effectively kills the chance of any of them becoming law, the concepts endorsed in them demonstrate the policy stance of many House Democrats and could include issues that will be injected in the 2020 presidential campaigns.