The Securities and Exchange Commission may reject the budget for the Public Company Accounting Oversight Board (PCAOB), in part because the new agency is seeking relatively big salaries for its top people, Bloomberg reported. The PCAOB is charged with overseeing the auditing profession.
The $153 million budget request gives employees average pay increases of 30 percent, according to the wire service. That would put the average salary at the PCAOB at $203,000. William McDonough, who oversees the PCAOB, earns $575,000, while the other four members of the Board receive $468,000.
But the PCAOB average salary is about $60,000 more than the annual pay of SEC Chairman William Donaldson, Bloomberg points out. Donaldson is paid $145,600 per year, and the SEC’s other four commissioners are paid $136,900.
Altogether, the PCAOB’s budget has more than doubled since it was created two years ago, according to Bloomberg. The board employs about 300 people and plans to hire another 150 in 2005.
“I just don’t see that there is any effective control over this organization,” Peter Wallison, a resident fellow at the American Enterprise Institute in Washington and a former White House counsel under President Ronald Reagan, reportedly said.
SEC spokesman Matt Well told the wire service the agency is “working very closely with the PCAOB on their budget,” but declined to comment further.
Under the Sarbanes-Oxley Act of 2002, the SEC is responsible for approving the PCAOB’s budget. PCAOB spokeswoman Christi Harlan told Bloomberg that she wasn’t aware that the SEC may not approve the board’s budget. She also said the board has not yet set staff salaries for next year.
Harlan did add that critics “should be aware that Congress deliberately directed the PCAOB to pay a competitive salary with the marketplace. This is a very, very tight market for accountants.”