Frank Urges SEC to Revive "Katie Couric Rule"
05 February 2010
House Financial Services Chairman Barney Frank (D-MA) this week implored the SEC to revise its disclosure rules to require companies to disclose their highest paid employees, regardless of whether they are senior executives. Reflecting his frustration over being unable to mandate pay restrictions, Frank said the SEC “can do that without us. There’s no point in legislating.” Frank’s suggestions would amount to a reinstatement of the so-called “Katie Couric rule” which the SEC proposed in 2006 to require companies to disclose the three most highly compensated employees in addition to the named executive officers. The rule’s name comes from the fact that it would have resulted in disclosure of star newscaster and professional athlete pay and others who had no role in the actual policymaking decisions of the firm. The SEC abandoned the proposal after HR Policy and other business groups argued that the disclosures would reveal competitive pay information, thus allowing other companies to recruit top talent, and would create employee relations problems without providing any meaningful information to shareholders. Meanwhile, Frank’s committee is developing legislation to give shareholders of financial services firms the right to a nonbinding vote on the share of total revenue dedicated to compensation.