September 18, 2013
SEC Proposes Pay Ratio Rules
– Broc Romanek, CompensationStandards.com
The SEC just wrapped up an open Commission meeting in which it proposed pay ratio rules by a 3-2 vote. The proposed rule doesn’t specify any required calculation methodologies for identifying the median employee in terms of total compensation for all employees – so companies would have flexibility (eg. can use statistical sampling) – and companies would then disclose their methodology.
The methodology would cover “all employees,” which is defined to include full-time, part-time, temporary, seasonal and non-U.S. employees – counted as of the last day of the company’s fiscal year (and include those employed at subsidiaries). No press release or proposing release yet. With a 60-day comment period – and a transition period noted in the proposing release – it looks likely that final rules would apply for the for the spring ’16 proxy season using ’15 fiscal year information. I’ll blog more details tomorrow…
– What This Means – There is still time to register for our upcoming pair of executive pay conferences – which starts next Monday, September 23rd – to hear what Keith Higgins, the Director for the Division of Corporation Finance says about these proposed rules, as well as catch a “how to implement pay disparity rules” workshop that is part of the last panel on Tuesday, September 24th.
If you can’t make it to Washington DC to catch the program in person, you can still watch it by video webcast, either live or by archive. Register now.