U.S. Securities and Exchange Commission to decide about new compensation disclosures.
Oregon State Treasurer Ted Wheeler wants corporations to be more transparent about their executive compensation packages.
In a letter this week to the U.S. Securities and Exchange Commission, the Treasurer supported a new rule being drafted to require public companies to disclose “pay ratio” data. The information will show how salaries and benefits for top executives compare to other workers at the same companies.
“We support compensation packages that are aligned to reward long-term positive performance,” the Treasurer wrote. “Unfortunately, there are few tools available today to help measure whether compensation practices are truly in the best interests of both companies and shareholders.”
The pay ratio disclosures are anticipated under the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, and the SEC is writing the rules to enforce it.
Oregon is a global investor and the State Treasury manages a portfolio worth more than $84 billion, much of it invested in shares of public companies. The largest state trust fund is the Oregon Public Employees Retirement Fund, which stood at $66.3 billion as of Oct. 31.
The Treasurer is the custodian of state funds and also a member of the Oregon Investment Council, which oversees investment policies for the state. As a responsible investor on behalf of beneficiaries, the Council takes a keen interest in decisions in corporate boardrooms that can affect shareholders and long-term profitability. That includes considering whether executive compensation levels serve shareholders well.
At corporate annual meetings, shareholders get the opportunity to show support for executive salary and benefit packages via “Say-on-Pay” advisory referendums.
With the guidance of a consultant hired by the Oregon Investment Council, the Oregon Public Employees Retirement Fund scrutinizes compensation proposals based on data now available – and opposed 492 of the 3,206 proffered “Say-on-Pay” referendums this year in the United States and Canada.
A copy of the Treasurer’s Dec. 2 letter to the SEC can be found under “topics of interest” at www.oregon.gov/treasury/Newsroom/
The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. State investment policies are overseen by the Oregon Investment Council. The State Treasury also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices.
