New York State Comptroller Thomas DiNapoli today announced that the New York State Common Retirement Fund has reached agreements with Microsoft, CVS, Macy’s, The TJX Companies, and to reexamine their CEO and executive pay “and adopt policies that take into account the compensation of the rest of their workforces.” In response to the agreements, the Fund withdrew its shareholder resolutions with the companies.

“We've seen a growing disparity in corporate income in the United States for years, with CEO pay rising dramatically while wages for most other company employees have remained flat,” DiNapoli said in a statement. “We are encouraging companies to adopt policies that take their entire workforce into consideration rather than setting CEO pay solely by benchmarking it against other CEOs. Overall employee compensation and executive pay has been and will continue to be a key factor for how we engage with companies going forward.”

The New York State Common Retirement Fund is the third largest public pension fund in the United States, with an estimated $207.4 billion in assets under management as of June 30, 2018.

According to research by the Economic Policy Institute, as cited by DiNapoli, CEOs of America’s largest firms earned $271 for every dollar their employees earned in 2016. In 1995, the CEO-to-worker pay ratio was 123-to-1; in 1978, it was 30-to-1; and in 1965, it was 20-to-1.

Many companies’ compensation committees use peer group benchmarks to set their target CEO compensation. These compensation targets are then subject to performance adjustments.

“Although many companies target CEO compensation at the median of their peer group, certain companies have targeted their CEO’s pay well above the median. In addition, peer groups can be ‘cherry-picked’ to include larger or more successful companies where CEO compensation is higher,” DiNapoli said.

New York officials have long advocated for disclosure of a CEO pay ratio, as mandated by the Dodd-Frank Act and implemented by the SEC in 2015. Companies may disclose supplemental information about their workforce to provide context and explain their company’s pay ratio data.

DiNapoli says the New York fund’s portfolio companies should align CEO pay practices with their pay practices for other employees and provide supplemental information that helps investors. It has previously come to agreements on this issue with a variety of corporations, has a similar proposal at Archer-Daniels-Midland Co., and will file with several other companies in the coming year.