Publicly traded companies in Connecticut and beyond have begun to disclose how much their employees earn compared to their chief executives.
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Publicly traded companies in Connecticut and beyond have begun to disclose how much their employees earn compared to their chief executives.
The new disclosure requirement is one small component of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the wide-ranging law Congress passed in 2010 in an attempt to reform some of the practices that helped lead to the 2008 financial crisis.
The pay ratio disclosure rule has kicked in, despite attempts by some in Congress to repeal it.
As of press time, a majority of Connecticut publicly traded companies headquartered or with a significant presence in Greater Hartford made their first pay ratio disclosures in filings to the U.S. Securities and Exchange Commission.
From banks to manufacturers to insurers, companies are required to disclose median employee pay for the vast majority of their workers and how it compares to CEO pay.
For local companies that filed disclosures as of press time, New Britain's Stanley Black and Decker had the biggest pay disparity, with its CEO compensation 357 times its employees' median pay.
Stanley President and CEO Jim Loree earned $16.2 million last year, compared to the company's median employee pay of $45,449, the company said.
However, Stanley's ratio illustrates that comparisons to other companies can be tricky, since some have all U.S. workforces and others have a high number of employees in foreign countries, where pay levels may be lower.
Stanley, for example, has more than 50,000 workers, 70 percent of which are outside the U.S. The company said that impacted its ratio.
“As an additional point of reference, if this calculation took into account only our U.S. employee population, the estimated pay ratio would be 186:1,” the company wrote in an SEC filing.
Second highest on the local list in terms of pay disparity was Bloomfield health insurer Cigna, whose CEO David Cordani made $17.6 million last year, compared to median employee compensation of $63,010, a ratio of 279:1.
Cigna has 38,271 U.S. employees and 7,561 in other countries (and was able to exclude over 2,200 members of that foreign workforce from its calculation, under SEC rules).
Cigna's filing also warned about trying to compare it to other companies, writing that different companies might have a “significantly different work force structure,” making them “likely not comparable to our CEO pay ratio.”
Meanwhile, Farmington's United Technologies Corp. had a pay ratio of 235:1, according to its SEC filing.
UTC CEO and Chairman Greg Hayes made $17 million in 2017 compensation vs. the company's $72,433 median employee salary. Its calculation included workers in a dozen countries, while smaller employee groups in 36 other countries were excluded, according to SEC rules, the company said.
Bloomfield aerospace manufacturer Kaman Corp. had one of the smallest ratios. Kaman CEO Neil Keating's $2.7 million compensation package last year amounted to 43 times the median employee pay of $63,104.
Lower still on the list was Willimantic-based SI Financial, parent of Savings Institute Bank & Trust Co., whose CEO Rheo Brouillard's compensation of $963,569 was 28 times higher than the median employee salary of $34,998.
Not yet available as of press time were pay ratios from Aetna, Amphenol, Avangrid, The Hartford, SS&C Technologies and Travelers.
