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CALIFORNIA CORPORATE & SECURITIES LAW

CalPERS And Pay Equity

The Securities and Exchange Commission has given notice of its intent to adopt final pay ratio disclosure rules at its meeting next week.  In applauding the SEC’s proposed rules, the California Public Employees’ Retirement System observed:

Finally, we believe the ratio will be a number which prompts commentary and discussion, providing an important data point to inform a wider discussion on value and risk.

In this spirit of commentary and discussion, I took a look at CalPERS’ own pay equity.  According to the California State Controller’s office, the highest paid state employee in 2014 worked for CalPERS, as did the second and third highest paid state workers.  In fact, six out of the 10 highest paid state employees worked for CalPERS or the California State Teachers’ Retirement System (CalSTRS) that year.  This ranking does not include salaries paid by the University of California system, which according to this article had 28 employees (coaches, doctors and hospital administrators) who earned more than $1 million in 2014.

CalPERS’ top earner had total wages equal to $739,594 plus another $116,949 in retirement and healthcare costs in 2014.  In comparison, the average wages for CalPERS in 2014 was $65,387 (presumably this includes the top earners).  Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act required the SEC to adopt rules requiring the disclosure of the median, not the average.  I was unable to find the median employee for CalPERS and that employee’s wages could be more or less than the mean.

Finally, it is worth noting that CalPERS’ total wage bill has increased nearly 48% in the last five years, growing from $135,499,979 in 2009 to $199,954,448.  During this same period the number of employees at CalPERS grew by a bit more than 23%.

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