The US Securities and Exchange Commission's vote this week to expand disclosure requirements for executive pay is a major step forward. To fully address the problems of compensation, however, this reform should be accompanied by additional steps giving investors the power they need to use the extra information they will receive.

Companies have long been able to camouflage large amounts of pay that have nothing to do with performance. The reform would make transparent the magnitude of executives' total pay, providing a check on the escalation of remuneration levels.