This is the Cato Daily Podcast for Tuesday, August 11, 2015.

I'm Caleb Brown.

The Securities and Exchange Commission is telling firms they now must begin gathering and

publishing new numbers on executive compensation as those numbers relate to the

average worker. The new rule is costly and it has significant implications for

future policy relating to corporate compensation. Thea Knight is Associate Director of Financial

Regulation Studies at the Cato Institute.

She comments.

The SEC has implemented a rule that is required under Dodd-Frank,

which will public companies that are listed with the SEC

now have to disclose not only their CEO pay, which they're already required to do, but also

to disclose the ratio of that pay to the median workers pay.

Median worker, which is, I mean, for any companies, that could be thousands upon thousands of people.

It could be, and the rule does have some provisions that allows a certain amount of sampling

and it gives the company some latitude on how they calculate this, but they still have to make good faith

effort to get the median employee wage which could include I mean it includes

all American workers including part time so you know if somebody works 20 hours a, that gets put into the mix without any waiting as far as I'm aware.

And with a de minimis exception, foreign workers as well.

So what's the problem with publishing a number in their various

public filings that maybe investors care about? Maybe they don't. I think there are a few

problems. One of them is just the cost of doing this.

You know, gathering all of this information, crunching the data,

...