ESG Disclosure Simplification Act of 2021

Floor Speech

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Ms. VELAZQUEZ. Madam Speaker, I rise in strong support of H.R. 1187. Importantly, this package contains language from my legislation, the Greater Accountability in Pay Act that requires public companies to disclose the pay raise percentage of its executives and the pay raise percentage of its median employees over the past year and compare each to the rate of inflation. It also requires these companies to disclose the ratio between the two pay raise percentages.

This legislation is the next logical step of the CEO pay ratio disclosure requirement in the Dodd-Frank Act. The COVID-19 pandemic has left millions of working-class Americans feeling vulnerable and uncertain about their economic future--with many individuals and families facing reduced hours, furloughs, or outright dismissals.

However, an article published by the New York Times in April demonstrates the extraordinarily successful year it's been, financially, for America's biggest CEOs--even at many of the companies hit hardest by the events of the pandemic. The Times highlights how companies like AT&T, Hilton, Boeing, and Norwegian Cruise Line all took billions of dollars in losses in 2020 but still managed to pay each of their CEOs more than $20 million.

Unfortunately, excessive compensation packages received by many of America's CEOs is not a new or isolated event. The disparity between executive compensation and the average worker pay has been growing for decades. In August 2019, the Economic Policy Institute produce a report which highlights that, even before the pandemic, CEOs were earning far more than the typical worker, with CEO pay growing 940 percent between 1978 and 2018 while the wages for the typical worker grew by just 11.9 percent over that same period.

Additional transparency on pay ratios will also benefit investors, as data is key to their decision-making process. A balanced pay ratio is an indicator of a company's strong long-term performance and further pay ratio disclosures would provide better insight on a company's strategy, its values, and long-term outlook.

In order to get our economy back on track for everyone, we must increase worker pay and ensure that CEO pay ratios are in line with a corporation's fundamentals. I urge my colleagues to vote YES on bill.

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