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Nobody’s Business

I find this troubling:

Securities and Exchange Commission Chairman Christopher Cox said Friday that the agency will propose regulations to crack down on hidden executive pay as early as next month.

The SEC is drafting rules that would require companies to tally up salary, bonus, stock and option awards, and roll all benefits into a single figure. Cox plans to have the regulations ready “shortly” after Jan. 1.

“Today’s regulatory regime permits obfuscation or worse when it comes to executive compensation,” Cox said. “The notorious abuses, such as never-before-disclosed exit payments, are the byproduct of this leaky regime.”

Institutional investors also are pushing for better disclosure. TIAA-CREF made executive pay a corporate-governance priority for 2006, and the American Federation of State, County and Municipal Employees, a union with 1.4 million members, urged companies to give shareholders a vote on compensation.

We don’t force disclosure of the compensation packages of other employees, why should that of executives be public knowledge. More regulation is not required. Institutional investors who are unhappy with disclosure practices of particular companies can just refuse to invest in those companies.