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Get Ready for the Pay Ratio Rule

Louis M. Thompson | September 17, 2013

We know we have a compliance problem when the Securities and Exchange Commission is three years late in promulgating rules to comply with the Dodd-Frank Act provision to disclose a comparison of CEO pay to that of the rank and file. 

This controversial provision requires companies to include in its compensation plan disclosure “the ratio between the CEO's total compensation and the median total compensation for all other employees.” If the SEC holds true to its intentions to have this rule ready for the 2014 proxy season, it is a call to action for investor relations officers and corporate secretaries, in particular, to prepare plans to explain to their shareholders the specific complexities of this ratio of CEO pay to median employee compensation.

Steve Seelig, a senior regulatory adviser for executive compensation at Towers Watson, says...

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