Some CEO Pay May Be Spiraling Out Of Control

Federal regulators have taken a step toward requiring public companies to show the relationship between the compensation of their top executives and the company’s financial performance.

The 3-2 vote Wednesday by the Securities and Exchange Commission on the so-called “pay for performance” rules follows a 2013 proposal that would require companies to disclose the pay gap between CEOs and ordinary employees. The hot-button issue of executive compensation took on greater prominence during the 2008 financial crisis. Outsize pay packages were blamed for encouraging disastrous risk-taking and short-term gain at companies at the expense of long-term performance.

ABC’s Aaron Katersky joined us to discuss Thursday morning.

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