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Legal experts debate whether releasing CEO-to-median pay ratios causes confusion or keeps companies accountable




The Walt Disney Company Chairman and CEO Bob Iger, currently at the center of a public dialogue about executive compensation.
The Walt Disney Company Chairman and CEO Bob Iger, currently at the center of a public dialogue about executive compensation.
Jesse Grant/Getty Images for Disney

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Since the Dodd-Frank Act was passed in 2010 during the financial crisis, CEO-to-worker pay ratios have been under the microscope.

The legislation requires publicly traded companies to report their median employee pay and CEO pay ratio.

Subsequent legislation has begun to take shape across the country in response to such drastically imbalanced ratios, including the city of Portland, OR, which imposed a penalty business tax on firms where the pay ratio exceeds 100 to 1.

While some experts have suggested companies release even more financial data to hold them accountable as the pay ratio can be misleading, others say that more financial information could cause further confusion.

Guests:

Steven A. Bank, professor of business law at UCLA.

Michael Guttentag, professor of law at LMU's Loyola Law School where his expertise includes corporate law and securities regulation