October 3, 2016
Pay Ratio Preparedness: A Survey
– Broc Romanek
Anecdotally, I am hearing that some companies haven’t been doing much yet to prepare for the implementation of the SEC’s pay ratio rules. That’s not surprising given how busy people are – and that the implementation date seems so far away. As this Mercer spot survey notes, advance planning is key – and now is the time to start preparing.
Here are some key findings from the survey:
– Companies are making significant progress toward compliance. Three-quarters of respondents have already determined a method to identify the median employee or are considering one or more methods.
– A majority (60%) of respondents have estimated their ratio, with more than half reporting ratios under 200:1 and only 20% reporting ratios of more than 400:1.
– Ratios vary by industry. Industries with low ratios tend to have more professional staff, and those with high ratios have more part-time, temporary, and less-skilled employees. Sectors with the lowest ratios are in banking/financial services, technology, and nonfinancial services. The highest ratios are in retail/wholesale and consumer goods.
– About one-third of respondents are using or considering statistical sampling as a method to identify the median employee.
– Over 80% of respondents believe their data systems are ready or, with some manual effort, adequate to identify the median employee.
Note that compensation consultants are starting to roll out new memos on how to best prepare – including these ones from Deloitte Consulting & Willis Towers Watson posted in our “Pay Ratio” Practice Area…
Our Executive Pay Conferences: Only 3 Weeks Left! Here’s the registration information for our popular conferences – “Tackling Your 2017 Compensation Disclosures: Proxy Disclosure Conference” & “Say-on-Pay Workshop: 13th Annual Executive Compensation Conference” – to be held October 24-25th in Houston and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days.
Register Now: Huge changes are afoot for executive compensation practices with pay ratio disclosures on the horizon. We are doing our part to help you address all these changes – and avoid costly pitfalls – by offering a reasonable rate to help you attend these critical conferences (both of the Conferences are bundled together with a single price). So register now.