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Senators Demand SEC Action on Pay-Ratio Rule

Joe Mont | December 17, 2014

Among the more contentious rules the Securities and Exchange Commission has yet to finalize is a requirement that public companies to disclose a ratio of CEO pay to that of their median employee.

This week, 15 Democratic senators wrote to SEC Chairman Mary Jo White to demand that the rule, a Dodd-Frank Act requirement that has lingered in the proposal stage for more than a year, be brought to a vote by the end of the first quarter of 2015. “Pay ratio disclosure helps investors evaluate the relative value a CEO creates, which facilitates better checks and balances against insiders paying themselves runaway compensation,” they wrote.

The SEC issued its proposed rule in 2013. In calculating the comparison, it calls for companies to produce a median compensation figure for...

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