Despite vociferous opposition by many business leaders, the Securities and Exchange Commission on Wednesday morning approved a new rule that requires companies to disclose a comparison of their CEO’s pay to that of the median employee.
Under the SEC’s rule proposal, companies will need to produce a median compensation figure for all workers, domestic and overseas. In a concession to opponents, it will allow the use of statistical sampling to derive that figure. The methodology used must be disclosed to investors. This calculation will then be revealed as a ratio to CEO pay.
