Evening star., 1935-04-11
SALARY PUBLICITY
HELD CLASS WAR
Barring of Figures by S. E. c.
Opens Way to Wrong
Conclusions.
BY DAVID LAWRENCE.


With the repeal of the pink slip"
form of publicity of income tax re-
turns, attention is being directed here
to other abuses of privacy which have
no worthy public purpose and serve
only to intensity class prejudice and
misunderstanding.
Thus the Securities and Exchange
Commission requires that holdings OF
individuals in large companies shall
be made matter of record in the reg
istration statements for listing on
stock exchanges. The KreSge Co. has
just filed the data, but with protest
against the processes of publicity en-
veloping this aspect of registration in
the last few months.
The main purpose of the law, of
course. was to enable investors to know
the salaries and compensation paid
officers of the corporations in which
they held stock, and for the relation
ship of officers to stockholdings to be
disclosed.
System Subject TO Abuse.
Virtually all the safeguards desired
can be obtained in quite another way
by requiring the regular annual state
ments sent tc stockholders to contain
all such information. Data of this
kind are legitimately of interest solely
to the stockholders. but when such in
formation is filed with the Securities
Commission it becomes public prop
erty and as such subject to all the
abuses which income tax publicity has
introduced and which was the under
lying reason why Congress voted over
whelmingly in both Houses to repeal
the pink Slip provision.
There is reason TO believe that the
Securities and Exchange Commission
Is studying the problem to determine
on salaries and stockholdings will
serve the purposes of the law and
vet not introduce eXtraneous questions
hardly contemplated by the original
&C..
1t might be argued that there can
te no harm in ''pitiless publicity
with respect TO compensation paid
company officers, or to the spreading
of knowledge as to which stockholders
own the largest share of company's
assets.
Curiosity Seekers Aided.
Basically. there is no harm in con-
fn'nP the data to investors. and most
corporations. especially those with a
large number of shares or with a
listing on public stock exchange.
have not the slightest objection to
theil distribution to those who ought
10 have them. But it is the parading
of such information before those who
have no concern with or RESPONSE
hility for the success or failure of cor
po.ate operations which makes the
step a dangerous one.
Wnen 500 600 salary, for instance,
is mentioned on listing, it is prompt
ly stalked about as the most i'm
portant piece of information about a
corporate which is filing a registra-
ton statement with the Securities
Commission. Yet the 100000 is not
what the corporation president gets
at all. His Federal income tax alone
probably would take at least $50, 900,
TO say nothing of his State and city
taxes His net return is not stated
anywhere.
! Maybe, therefore. a corporation
president who is represented as re-
ceiving 100000 has the use of half
that sum. Would those who are un-
familiar with these facts take into
consideration the responsibilities of
the president in question or his ability
to earn that sum in another COM
peting company if he resigned? Very
likely not. The emphasis is on the
amount and not on what service is
performed or on the few years of life
that such a salary is enjoyed after
20 or 80 years of climbing the ladder
from the bottom,
! Other Professions Similar.
If Congress were to assume that
is worth $4,000 a year, for
Example, in the management of, say,
a business doing volume of Sl,000,-
D00 year or more, it would be neces-
sary to say also that no lawyer or
doctor or any other practitioner of a
profession could earn what his years
OF experience and study and skill
might merit. Congress has shown a
at times to become inter-
ested in this subject, but legislators
themselves realize the merit system in
America affords them a chance when
they leave Office to increase their in
comes without limit through the prac-
tice of their professions.
Any time that Congress wants to
find out what salaries are paid, the
income tax returns are available. In
the meantime. the trials of business
are not decreased for the
harassed individuals who are trying
TO build up businesses nowadays when
class warfare is intensified by the
disclosure. without explanation, of |
salary data