Almost every public company in America is breaking the law when it comes to disclosing executive pay.

They won't be punished, though, because regulators can't agree on exactly what the law means.

Under the Dodd-Frank Financial Reform Act, which Congress passed in 2010, companies are supposed to compare their chief executive's pay to the earnings of an average worker. The Securities and Exchange Commission, which is charged with implementing this part of the law, has yet to issue rules on how to make the comparison.

Calculating a ratio sounds simple enough, but the definition of an average worker part isn't clear. Do you include foreign workers or just domestic ones? Part-timers or just full-timers?

Pay experts say the ratios, if they are ever published, will be misleading and not very useful. A CEO who fires all the janitors and outsources their work would look more reasonably paid than one who keeps janitors on the payroll.

"This number has more potential to cause mischief than to solve any problem," says Radhakrishnan Gopalan, a finance professor at Washington University in St. Louis who studies pay issues.

"It's a stupid idea," echoes Steven Hall, managing director of New York-based consulting firm Steven Hall & Partners.

The AFL-CIO would beg to differ. The labor organization lobbied for the pay-ratio requirement, and it wants to see the SEC enforce the law. It says the ratio is "essential for investors to determine if a company's executive pay is excessive."

It estimates that the average U.S. CEO makes 354 times as much as the average worker. The ratio is up from 42 in 1982, but it's also down from 531 times the average worker's pay in 2000, when stock options and a rising stock market were lining executives' pockets.

The Center on Executive Compensation, a group funded by large corporations, has been lobbying to repeal the pay-ratio requirement. It says the calculation would be difficult to make, citing the example of one global company with 137,000 employees on 1,000 different payroll systems.

The center also points out that, when advocacy groups have pushed for this disclosure at individual companies, shareholders have shown little interest.

The SEC has given no indication of when it will issue rules for disclosing the pay ratio. When it does, you can expect cheers from unions and some politicians, jeers from the corporate sector _ and probably a giant yawn from investors.

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ABOUT THE WRITER

David Nicklaus writes for the St. Louis Post-Dispatch. He can be reached at dnicklaus@post-dispatch.com.

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