SEC Seeks Public Comments on Implementation of Pay Ratio Rule

Acting Chairman of the SEC Michael S. Piwowar issued a statement seeking public comments on any unexpected challenges that issuers have experienced as they prepare to comply with the SEC's pay ratio rule.

Practical Law Corporate & Securities

On February 6, 2017, Acting Chairman of the SEC Michael S. Piwowar announced that the SEC staff is accepting public comments on:

  • Any unexpected challenges that issuers have experienced as they prepare to comply with the SEC's pay ratio rule.

  • Whether relief is needed as a result.

The pay ratio rule, mandated by Section 953(b) of the Dodd-Frank Act ( www.practicallaw.com/4-502-8619) , requires reporting companies to disclose the median of the annual total compensation of all company employees other than the company's chief executive officer (CEO), the CEO's annual total compensation, and the ratio between these two numbers. The first disclosure under the rule is due in 2018, covering a company's fiscal year beginning on or after January 1, 2017.

Public comments will be accepted for 45 days.

Acting Chairman Piwowar has also directed the SEC staff to:

  • Reconsider the implementation of the pay ratio rule based on any comments received.

  • Determine as promptly as possible whether additional guidance or relief may be appropriate.

To learn more about the final pay ratio rule, see Practice Note, The Pay Ratio Rule: Preparing for Compliance ( www.practicallaw.com/w-000-6887) and Standard Document, Preparing for Pay Ratio Disclosure: Presentation Materials ( www.practicallaw.com/w-000-6493) .

 
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