A Poor FT Page-One Pay Story

Pushing the big-business line in a lobbying campaign on pay disclosure

Boy, sometimes it’s just flat out hard to figure the Financial Times—a smart newspaper that not infrequently does dumb things, usually in the name of “scoops” or “exclusives.”

This morning it leads its page one with a thin and almost certainly bogus story on how a Dodd-Frank provision on pay disclosure will be a “logistical nightmare” for corporate America. Seriously, the FT splashes a story (and promotes it to media folks like me directly) on its front page touting the thinnest of Wall Street/Big Business bullshit.

US companies face a “logistical nightmare” from a new rule forcing them to disclose the ratio between their chief executive’s pay package and that of the typical employee, lawyers have warned…

Business sees the disclosure provision – buried in section 953(b) of the Dodd-Frank financial reform act – as a bureaucratic headache that may encourage false comparisons.

It gets even better:

The rules’ complexity means multinationals face a “logistical nightmare” in calculating the ratio, which has to be based on the median annual total compensation for all employees, warned Richard Susko, partner at law firm Cleary Gottlieb. “It’s just not do-able for a large company with tens of thousands of employees worldwide.”

So wait a stinkin’ minute. These people have gobs of PhDs calculating stuff like the probability of a flour beetle invasion and its effect on the price of wheat futures after a monsoon five months from now while making programs to exploit stock-price discrepancies of a penny or two in milliseconds—but they can’t figure out what the median salary is at their company and divide that into the CEO’s pay? Gimme Excel and a couple of hours and I’ll do it for you.

Here’s the only marginally better excuse:

The rule could also reward with a relatively low ratio those companies that outsourced low-paid work rather than keeping jobs in-house, lawyers said.

Why is this on the front page of the Financial Times? Why is the accompanying inside story slanted toward the corporate line?

And why do we learn only at the bottom of that second one that “Many of the crucial factors affecting the ratio have been left to the discretion of the Securities and Exchange Commission, which has to draw up the regulations to implement the new rule”? Why isn’t the FT self-aware enough to know it’s being used as part of the lobbying campaign to influence this regulation, which it admits doesn’t even exist yet?

Weak sauce.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.