Subscribe for 99¢

Executive pay packages have long been political targets, but they may become even bigger ones next year.

That’s when a controversial new rule, required by the Dodd-Frank Act of 2010, will require companies to compare their chief executive’s pay to that of an average worker. Bloomberg, in 2015, estimated that the CEO of McDonald’s earned 664 times as much as the folks working in its restaurants.

That’s an inflammatory number, although not an especially meaningful one for comparison purposes. A fast-food company could reduce the ratio by selling more restaurants to franchisees, or by outsourcing its janitorial services.

“It will give political fodder to politicians who don’t like corporations, but I don’t think it’s an economically meaningful number to focus on,” says Radhakrishnan Gopalan, assistant professor of finance at Washington University.

In February, the Securities and Exchange Commission asked for comments on whether it should delay or reconsider the pay-ratio disclosure. Time is growing short, however, to revoke the rule.

Eric Marquardt, a compensation consultant for Pay Governance in Clayton, says companies must spend between $25,000 and $35,000 just to gather information and calculate the ratio the way the SEC requires. Some of his clients have already begun compliance efforts.

“It’s the most expensive and the least valuable part of Dodd-Frank,” Marquardt said. “Yet, because of a lack of staffing (at the SEC) and the timing, it’s highly unlikely at this point that repeal will see the light of day.”

The SEC would have to go through a full rulemaking process to reverse the pay-ratio rule it adopted in August 2015. Even then, it would have to finesse the fact it’s under a congressional mandate to require such disclosure.

Some Republicans are talking about repealing all or part of Dodd-Frank, but that’s a tall order in a Congress that’s also dealing with complex health care and tax issues.

Dodd-Frank had other provisions that affect executive pay. It required companies to conduct nonbinding “say on pay” votes, which in just six years have become a central part of corporate America’s annual-meeting ritual.

“Institutional investors have gotten used to this,” Marquardt says. “They like having an annual vote on pay.”

Some companies groused about the votes at first, but many now say they appreciate the feedback from shareholders. The average company gets about 90 percent support for its pay practices.

Even though the votes are nonbinding, they’re something that shareholders value. That is probably enough to keep them in place, Marquardt says, Dodd-Frank or no Dodd-Frank.

Business Briefing e-newsletter

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

How much CEOs of local public companies made in 2016

[a] Wentworth became CEO on May 6, 2016. [b] Paz stepped down as CEO on May 6, 2016. [c] Hoskins became CEO in July 2015. [d] Rupp stepped down as CEO on May 1, 2016, and remains chairman. [e] Isle of Capri was acquired by Eldorado Resorts in May 2017. [f] Kellow became CEO in May 2015. [g] Spire is the former Laclede Group. [h] Fischer became CEO on May 1, 2016. [i] Hatfield became CEO on July 1, 2015. [j] Moore’s base salary is not directly paid, but reflects the portion of his compensation determined appropriate pursuant to the services agreement with Murray Energy Corporation. [k] Mills resigned as CEO in February 2017. Source: Company reports.

CEO Business Year Salary Bonus incentive Stock Options Pension All other Total 2016 pay Total 2015 pay % change
Michael Neidorff Centene 2016 $1,500,000 $6,602,400 $12,829,500 $411,800 $0 $625,283 $21,968,983 $20,755,103 5.85%
Robert V. Vitale Post Holdings 2016 $975,000 $1,800,000 $12,419,957 $2,629,121 $27,752 $158,658 $18,010,488 $9,465,925 90.27%
David Farr Emerson 2016 $1,300,000 $1,700,000 $7,368,000 $0 $4,258,000 $511,533 $15,137,533 $15,313,813 -1.15%
Timothy Wentworth [a] Express Scripts 2016 $1,214,231 $2,189,556 $7,333,334 $3,666,666 $0 $118,391 $14,522,178 $8,464,903 71.56%
John W. Eaves Arch Coal 2016 $1,025,000 $1,494,361 $10,237,770 $0 $189,651 $40,213 $12,986,995 $4,901,726 164.95%
Mark C. Trudeau Mallinckrodt 2016 $1,038,461 $1,587,500 $5,876,436 $3,900,004 $0 $159,340 $12,561,741 $9,728,506 29.12%
George Paz [b] Express Scripts 2016 $754,379 $724,129 $6,833,334 $3,416,666 $0 $188,293 $11,916,801 $14,835,587 -19.67%
Hugh Grant Monsanto 2016 $1,664,741 $565,457 $4,320,017 $3,657,163 $1,135,360 $498,246 $11,840,984 $11,928,836 -0.74%
A. Greig Woodring Reinsurance Group 2016 $1,229,538 $2,565,886 $3,975,025 $1,733,662 $807,864 $92,960 $10,404,935 $9,370,979 11.03%
Ronald J. Kruszewski Stifel 2016 $200,000 $3,021,000 $6,000,000 $0 $0 $92,235 $9,313,235 $1,237,276 652.72%
Diane M. Sullivan Caleres 2016 $1,030,000 $1,415,550 $4,528,800 $0 $48,322 $96,405 $7,119,077 $9,474,409 -24.86%
Warner L. Baxter Ameren 2016 $1,040,000 $1,213,000 $3,732,030 $0 $538,752 $114,874 $6,638,656 $6,493,706 2.23%
Alan R. Hoskins [c] Energizer 2016 $923,625 $1,586,561 $3,600,024 $0 $68,875 $125,028 $6,304,113 $9,400,761 -32.94%
John Stroup Belden 2016 $868,750 $1,660,750 $1,825,283 $1,525,278 $273,681 $100,466 $6,254,208 $6,921,110 -9.64%
Joseph Rupp [d] Olin 2016 $733,334 $547,200 $4,034,430 $0 $0 $191,082 $5,506,046 $18,680,806 -70.53%
Ronald Shaich Panera Bread 2016 $873,320 $2,019,875 $1,311,079 $0 $0 $42,451 $4,246,725 $4,934,479 -13.94%
David Kemper Commerce Bancshares 2016 $960,305 $1,138,700 $1,477,802 $382,573 $0 $143,141 $4,102,521 $3,991,234 2.79%
Virginia M. McDowell Isle of Capri Casinos [e] 2016 $782,750 $714,490 $1,519,376 $816,453 $0 $0 $3,833,069 $1,795,675 113.46%
Glenn L. Kellow [f] Peabody Energy 2016 $997,896 $2,433,266 $1,085,000 $0 $0 $17,610 $3,535,876 $4,811,222 -26.51%
Suzanne Sitherwood Spire [g] 2016 $820,673 $830,000 $1,548,808 $0 $170,628 $123,094 $3,493,203 $3,139,416 11.27%
V.L. Richey, Jr.  Esco Technologies 2016 $824,500 $883,300 $0 $1,429,500 $129,472 $79,888 $3,346,660 $2,847,695 17.52%
John E. Fischer [h] Olin 2016 $836,000 $589,608 $1,325,320 $334,875 $64,075 $152,749 $3,302,627 $5,056,990 -34.69%
Jeffrey S. Davis Perficient 2016 $568,750 $0 $2,274,899 $0 $0 $22,417 $2,866,066 $2,753,575 4.09%
Charles R. Gordon Aegion Corporation 2016 $650,000 $325,000 $1,400,000 $0 $0 $172,291 $2,547,291 $3,293,808 -22.66%
David P. Hatfield [i] Edgewell Personal Care 2016 $900,000 $1,360,557 $0 $0 $137,327 $77,543 $2,475,427 $9,357,570 -73.55%
Sharon John Build-A-Bear Workshop 2016 $694,231 $0 $625,003 $663,492 $0 $5,362 $1,988,088 $1,840,006 8.05%
Eric H. Brunngraber Cass Information Systems 2016 $584,157 $214,700 $339,654 $0 $480,524 $45,911 $1,664,946 $1,316,748 26.44%
Jon P. Vrabely Huttig Building Products 2016 $547,115 $766,615 $250,000 $0 $0 $11,221 $1,574,951 $1,490,350 5.68%
Peter F. Benoist Enterprise Financial Services 2016 $516,375 $260,015 $259,350 $0 $0 $92,388 $1,128,128 $1,018,872 10.72%
Robert D. Moore [j] Foresight Energy 2016 $250,000 $800,000 $0 $0 $0 $0 $1,050,000 $250,000 320.00%
Jeffrey S. Hollister American Railcar Industries 2016 $350,000 $159,328 $524,997 $0 $0 $7,950 $1,042,275 $1,145,516 -9.01%
Daniel G. Korte LMI Aerospace 2016 $500,000 $0 $500,007 $0 $0 $8,935 $1,008,942 $1,429,805 -29.43%
William C. Mills [k] Stereotaxis 2016 $489,250 $131,217 $89,778 $0 $0 $2,060 $712,305 $936,187 -23.91%
Robert L. Montgomery Reliv International 2016 $610,494 $0 $0 $0 $0 $45,957 $656,451 $672,509 -2.39%
Earl R. Refsland Allied Healthcare Products 2016 $429,000 $0 $0 $0 $0 $73,453 $502,453 $503,164 -0.14%
Timothy D. Boyd Peak Resorts 2016 $442,000 $0 $0 $0 $0 $9,443 $451,443 $465,173 -2.95%
Paul A. Novelly FutureFuel 2016 $0 $0 $999 $0 $0 $0 $999 $1,028 -2.82%