SEC Proposes Rules on Pay Ratio Disclosure | White & Case LLP International Law Firm, Global Law Practice
SEC Proposes Rules on Pay Ratio Disclosure

SEC Proposes Rules on Pay Ratio Disclosure

On September 18, 2013, the Securities and Exchange Commission approved by a three-to-two vote proposed rules implementing Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed rules would amend Item 402 of Regulation S-K to require disclosure of (i) the median of the annual total compensation of all employees of the issuer (excluding the chief executive officer); (ii) the annual total compensation of the chief executive officer (or equivalent position); and (iii) the ratio of the median disclosed to the annual total compensation of the chief executive officer. The disclosure would be required in any annual report, proxy statement or registration statement that would otherwise require executive compensation disclosure under Item 402 of Regulation S-K. Emerging growth companies, smaller reporting companies and foreign private issuers would be exempt from the pay ratio disclosure requirements. This Client Alert summarizes the material features of the proposed rules and the key issues that public companies should begin to consider in preparation for compliance.

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