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Retail executives with hefty pay packages and plenty of low-wage employees could end up looking worse than bank leaders when the rule requiring companies to report the gap between their chief executive officer and their median worker goes into effect.
The pay-ratio rule, adopted by the U.S. Securities and Exchange Commission last month, has been championed by supporters as a way of highlighting the growing wage gap between executives and rank-and-file employees. It could increase scrutiny of executives at companies with large U.S.-based workforces earning near the minimum wage, shifting attention away from managers at investment banks and hedge funds.
“Any kind of company with a large seasonal or temporary workforce or college kids with lower pay, like retailers, might be concerned with the ratio,” said Deborah Lifshey, Managing Director at Pearl Meyer & Partners, a New York-based executive-compensation consulting firm.