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SEC offers interpretive guidance, scenarios for pay ratio rule

Joe Mont | September 22, 2017

In recent public comments, staffers at the Securities and Exchange Commission have made it known that, despite numerous efforts to the contrary, the controversial pay ratio rule remains on track with a fast-approaching compliance date.

Adding to the warnings of imminent effectiveness, the Commission has approved interpretive guidance intended to assist companies in their efforts to comply with the Dodd-Frank Act mandate.

Under the final rule, registrants must provide pay ratio disclosure for the first fiscal year beginning on or after January 1, 2017, which means that registrants will begin making pay ratio disclosures in early 2018. Those disclosures, require a comparison of CEO pay with compensation of a public company’s median employee.

“It’s our priority to make sure that we implement disclosure rules mandated by Congress in a way that is true to the mandate and, to the extent practicable,...

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