Worst. Argument. Ever.

17 May 2011, 0249 EDT

The Dodd-Frank Act also promises to shed some sunlight on ever-rising CEO pay levels. As Sam Pizzigatti explains, “corporations must now also report their overall wage ‘median’ and the ratio between this median and their top pay.” Seizing on some laughable comments on how “unduly burdensome” the law is, “the House Financial Services Committee’s Capital Markets Subcommittee [recently] approved, by a vote of 20 to 12 . . . legislation (H.R. 1062) to repeal the Dodd-Frank pay ratio mandate.”

Here’s the argument for why this requirement is “unduly burdensome”:

The burden of this median pay calculation requirement is significant. It would require a company to gather and calculate compensation information for each employee as required for senior executives under the SEC disclosure rules, determine the pay of each employee from highest to lowest, and then identify the employee whose pay is at the midpoint between the highest- and lowest-paid employee. No public company currently calculates each employee’s total compensation as it calculates total pay for CEOs on the proxy statement; therefore, companies would be required to invest considerable resources to implement this mandate to produce a meaningless statistic.

And, OMG, many companies have overseas offices with different pay systems on, get this, different computers!!

Do you hear that noise? That, my friends, is the sound of oligarchy.

The process of finding the median (pictured above) was so exhausting that Dan went to sleep immediately after writing this post.

Dan Nexon

Daniel H. Nexon is a Professor at Georgetown University, with a joint appointment in the Department of Government and the School of Foreign Service. His academic work focuses on international-relations theory, power politics, empires and hegemony, and international order. He has also written on the relationship between popular culture and world politics.

He has held fellowships at Stanford University's Center for International Security and Cooperation and at the Ohio State University's Mershon Center for International Studies. During 2009-2010 he worked in the U.S. Department of Defense as a Council on Foreign Relations International Affairs Fellow. He was the lead editor of International Studies Quarterly from 2014-2018.

He is the author of The Struggle for Power in Early Modern Europe: Religious Conflict, Dynastic Empires, and International Change (Princeton University Press, 2009), which won the International Security Studies Section (ISSS) Best Book Award for 2010, and co-author of Exit from Hegemony: The Unraveling of the American Global Order (Oxford University Press, 2020). His articles have appeared in a lot of places. He is the founder of the The Duck of Minerva, and also blogs at Lawyers, Guns and Money.