Sunshine and stars

AS MUCH AS BRAD, JEN AND KATIE would like to keep details of their love lives out of the tabs, there’s an even deeper secret the studios would like to keep out of their annual reports: details about Brad’s, Jen’s and Katie’s salaries. Unfortunately, if Hollywood has anything to say about it, we’ll never get the chance to see how truly well compensated our celebrities are.

That’s because a handful of movie studios and media companies could successfully block a proposal by the Securities and Exchange Commission that would force public companies to disclose how much they pay their most well-compensated employees. The rule, which the agency may vote on this summer, is part of a broad push to give shareholders a better sense of what public corporations pay their executives and other top wage earners.

One aspect of the SEC’s proposal would force corporations to disclose what they pay their three top wage earners if that amount exceeds what top corporate officers earn. Such information isn’t now available, but it should be. On Wall Street, top brokers can earn several times what the chief executive of the investment bank makes; it’s the same with traders at oil companies, and stars routinely make more than studio chiefs.

Such compensation isn’t necessarily wrong; studio chiefs, at least theoretically, are in the best position to know what kind of deal to offer Will Ferell to make a sequel to “Bewitched.” Nor is the issue whether that sequel is a good idea, although -- again, speaking hypothetically -- some studios may be embarrassed about how much they pay stars to appear in flops. The issue is that shareholders have a right to know how much such talent costs, especially if it has a significant effect on the bottom line.

Still, companies such as Dreamworks Animation SKG Inc. and Walt Disney Co. are fighting this proposal. They say that letting shareholders know how much they pay stars and producers could ruin the industry. In a letter to the SEC in April, Dreamworks Chief Executive Jeffrey Katzenberg said the rule would “reveal confidential and proprietary information to the company’s competitors ... [and] cause significant employee morale issues.”

Please. More likely, stars and hot-shot producers would use the information to negotiate better deals for themselves. And the underlying principle, more important than Hollywood’s fragile egos, is that public corporations that give an employee a gargantuan salary or a cut of profits should have to reveal that information to shareholders.

Unfortunately, all this West Coast whining may be working. Because of pressure from Hollywood, SEC Chairman Christopher Cox has suggested that the agency may scrap asking for disclosure about nonexecutive compensation in favor of better disclosure about top management. That isn’t enough.

Hollywood’s penchant for secrecy has its limits. Americans may never learn the truth about Tom and Katie’s romance. But if Tom and Katie make enough, shareholders should be able to learn how much they get paid.