by Richard A. Epstein
September 24, 2013
This past week, the Securities and Exchange Commission announced that it is preparing a full new set of regulations on CEO compensation that are in keeping with the Dodd-Frank law. These regulations are the brainchild of Senator Robert Menendez, a New Jersey Democrat, who believes that investors deserve to know “whether public companies’ pay practices are fair to their average employees, especially compared to their highly compensated CEOs.” The seductive search for “fairness” is, however, both mischievous in its choice of ends, and perverse in its selection of means. The new regulations could cost billions and yet provide no useful public information, in light of the massive amounts of information already available.