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Time - Man of the Year
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Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso
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1993-04-08
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THE WEEK, Page 24BUSINESSForced Disclosure
New SEC rules require corporations to come clean on pay packages
Starting next year, highly paid corporate executives are
going to have a lot of explaining to do. Under new regulations
adopted by the Securities and Exchange Commission, companies
will have to disclose in unprecedented detail how much their top
executives earn, as well as tell stockholders how those pay
packages were determined. The rules are the latest effort in a
movement by stockholder groups and politicians to curb excessive
pay and perks. Shareholders at 43 corporations, including IBM,
Bell Atlantic and Chrysler, challenged CEO compensation this
year. And at least two pay-disclosure bills have been introduced
in Congress.
The new SEC rules will require companies to publish charts
in their annual reports that compare salaries with stock
prices. Companies will also have to assign values to the stock
options that executives receive. Although the regulations will
provide shareholders with more ammunition to fight what they
consider to be unwarranted compensation, many critics say the
new law doesn't go far enough. They want to give shareholders
the right to determine the actual pay of top executives. Others
want to get at it by limiting corporate tax deductions for
excessive salaries.