SEC Issues Rule on CEO-to-Worker Pay Ratio Disclosures

money_bag_svgLast week, the Securities and Exchange Commission (SEC) released a rule requiring companies to disclose the CEO-to-worker pay ratio.  Despite objections by many corporations, the rule covers all employees including seasonal, international, and part-time workers.  The SEC provides companies the option of using the entire workforce or a representative sample in the calculation.

There will now be a 60-day comment period.  The SEC voted for the rule 3-2, with the two Republican Commissioners who voted against the proposal calling it a special interest provision and proclaiming “shame on the SEC.”

Proponents of the rule argue that it will give shareholders and other stakeholders a clear line of sight into human capital management and worker pay. 

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Paul Dacier (L ’83) Assumes Presidency of the Boston Bar

Paul Dacier
Paul Dacier (Boston Globe)

An important part of professionalism is, well, participating in the profession. The Law School has a rich record of alumni and faculty involvement in most walks of the profession, including leadership positions in local and state bar associations. Many alumni have also been recognized for their outstanding work as lawyers.

Paul Dacier (Arts ’80; L ’83) is part of this distinguished cohort. In 2013 Paul has garnered well-deserved recognition for his legal work on behalf of EMC Corp., while also serving as the President of the Boston Bar Association (BBA) for 2013-14. Indeed, the Boston Globe reports that Paul is the first general counsel to assume the BBA’s presidency in its over 250 year history.

Paul is general counsel for EMC, a $20 billion, publicly traded corporation with over 60,000 employees and a legal department of over 100 lawyers. EMC is one of the nation’s leading corporations specializing in information storage (“the cloud”) and related technology. Under Paul’s direction, the legal department has successfully defended EMC’s position in high-visibility patent litigation and developed innovative approaches to mergers and acquisitions. The National Law Journal recently named EMC’s legal department as the Boston Legal Department of the year (August 2013).

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Farewell to Ronald H. Coase

CoaseAlmost every student who has attended law school in the past 40 years has encountered Ronald Coase and the Coase Theorem. Even professors who disagree with Coase feel compelled to expose their students to his famous theorem, even if only to rebut its argument. As a long-time teacher of both Torts and Property who is not an advocate of law and economics, I cannot imagine teaching either course without references to the Coase Theorem as a way of evaluating the correctness of legal rules.

In a nutshell, Coase, widely acknowledged as the founder of the law and economics movement, posited that in a world without transaction costs, individuals would bargain with each other to achieve the most efficient use of resources, and legal rules would be irrelevant. As a consequence, in a world with transaction costs, Coase seemed to suggest that legal rules should be constructed so that they favor the most efficient user, since that is the party who will eventually end up with the resource . The Coase Theorem was presented to the world in a 1960 article entitled, The Problem of Social Cost, which appeared in the Journal of Law and Economics and is still the most frequently cited law review article in history.

Sadly, Robert Coase died last week in Chicago at the age of 102. Born in London and educated at the London School of Economics, Coase first achieved widespread recognition in 1937 with the publication of his article, The Nature of the Firm, which introduced the concept of transaction costs and explained why large economic deals were handled by large integrated firms rather than by temporary market-based alliances of suppliers.

Coase came to the United States in 1951 as a professor at the University of Buffalo, and moved to the University of Virginia in 1958. He was a member of the University of Virginia’s Thomas Jefferson Center for Political Economy when he published his most famous article. In 1964, he left Virginia for the University of Chicago, where he remained until his death.

Coase was awarded the Nobel Prize in Economics in 1991. His final book, How China Became Capitalist, was published in 2012 when Coase was 101 years old.


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