“Don’t Mess with Texas” in the “S.E.C. urged to require more transparency on labor spending” section


Publish Date:
June 7, 2022
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The New York Times
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A group of former regulators will ask the S.E.C. to issue new rules, illuminating the cost and payoffs of work force investments. The petition, which DealBook is first to report, contends that investors need more information about what companies pay workers and urges the S.E.C. to propose several new rules, including requiring companies to disclose how much they are investing in their workforces.

The group includes Joseph Grundfest of Stanford and Robert Jackson of N.Y.U., two former S.E.C. commissioners who have often had opposing views. “We differ in our views about the regulation of firms’ relationships with their employees generally,” they wrote. “But we all share the view that investors need additional information.”

The current accounting and tax rules make investing in machines more attractive than spending on humans, the group says. A million dollars’ worth of robots are an asset on balance sheets, whereas the same amount spent on job skills is an cost that needs to be expensed immediately, according to one of the petitioners, Colleen Honigsberg of Stanford Law School. Currently, only about 15 percent of public companies disclose labor costs.

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