SEC Adopts Final Pay Ratio Disclosure Rule
On August 5, 2015, in a 3-2 vote, the SEC adopted a final rule implementing the provision of the Dodd-Frank Act that requires U.S. public companies to disclose the ratio of their CEO’s compensation to that of their median employee. The final rule is generally consistent with the SEC’s original proposal that was issued in 2013, but contains a few accommodations, which are intended to help mitigate compliance costs. This memorandum summarizes the key aspects of the final rule, highlighting the principal revisions. The final rule will become effective 60 days following publication in the Federal Register.
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