Korn Ferry Survey: Retailers Have Concerns Over Upcoming Rule Requiring Their Companies to Disclose Ratio of CEO Pay to Median Employee Salary
-- Nearly Two-Thirds Are Worried about Explaining Pay Ratio to Employees –
-- Comparison of their Companies’ Pay Ratio to Other Retailers Top Concern --
LOS ANGELES, Nov. 20, 2017 – Retailers have several concerns regarding the upcoming implementation of the Security and Exchange Commission’s (SEC’s) CEO Pay Ratio disclosure ruling, according to a new survey by Korn Ferry (NYSE: KFY). The survey of retail leaders finds the majority of respondents worry about how their CEO pay ratio will compare with other retailers and other industries.
The SEC ruling requires public companies to disclose the ratio of total compensation of their Chief Executive Officer (CEO) to the total compensation of the median employee. Data will first have to be compiled for fiscal year 2017.
Key Survey Findings
“Retailers are concerned that their pay ratio is likely to be higher than other industries because of the significant use of entry-level, part-time employees,” said Craig Rowley, Korn Ferry Senior Client Partner, Consumer and Retail. “Other industries that predominantly use full-time employees are expected to have CEO pay ratios in the 100 to 600 range,” added Rowley.
“It’s not surprising that retail organizations are worried about the internal and external optics of their CEO pay ratio,” said Cory Morrow, Senior Client Partner, Executive Pay & Governance, Korn Ferry. “However, we’d recommend that retail organizations not hide the ratio from their employees. Instead, we recommend putting forward clear communication on how the ratio is calculated and why it is not a clear measure of compensation in the organization.”
About the Study
Leaders from 50 retailers with a median revenue of $6.4 billion participated in the September 2017 survey.
About Korn Ferry
Korn Ferry is the preeminent global people and organizational advisory firm. We help leaders, organizations, and societies succeed by releasing the full power and potential of people. Our more than 7,000 colleagues deliver services through our Executive Search, Korn Ferry and Korn Ferry divisions.