There is still a huge pay gap between CEOs and their employees, but at least now the employees will know what that number really is. The Securities and Exchange Commission (SEC) passed new rules that will require more transparency in publicly-traded companies, according to Fox Business.
The new rules barely passed a vote, winning 3-2. Both Republican members of the five-person panel voted "no." Under the rules, companies are now required to reveal the median pay their workers receive and compare it to what the CEOs receive.
This shift in policy is part of the Dodd-Frank banking reform legislation that was passed in 2010. "The pay ratio disclosure will provide another metric that is useful on many fronts," SEC Commissioner Kara Stein (D) said, Fox Business reported.
"Addressing perceived income inequality is not the province of the securities laws or the Commission," SEC Commissioner Daniel Gallagher (R) said, in a prepared statement before the vote.
This ruling may not be the final word on the issue. The U.S. Chamber of Commerce is expected to challenge the new rules, according to the Wall Street Journal. The information will give company shareholders an idea of how their money is being spent. The new disclosure ruling will go into effect in 2017.
Many people have made passionate statements about the new ruling. Since the new rules were first proposed two years ago, the SEC received more than 280,000 comments o the topic, according to Yahoo! News. Public companies that have less than $75 million in total shares or less than $50 million in annual revenue are exempt from the ruling.