August 8, 2018
Pay Ratio: Contextualizing Unflattering Results
– Liz Dunshee
With almost one year of pay ratio disclosure behind us, companies are now evaluating how to contextualize the inevitable peer comparisons – as well as year-over-year trends. This Bryan Cave blog outlines three strategies:
1. Include a supplemental ratio (I previously blogged that this isn’t very common…so far. The latest stats show about 20% of companies using one.)
2. Include supplemental text – e.g. describing how the company’s business strategy impacts its workforce & pay ratio
3. Disclose the ratio immediately after the CD&A, which can introduce themes or drivers that affect it
Compensation committees can also start evaluating variations in their companies’ pay ratios, a topic that Broc previously highlighted.