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Disclosure Update: How Companies Are Tackling Comp Rules

Joe Mont | November 17, 2015

The Dodd-Frank Act was brimming with new disclosure demands regarding executive compensation. Slowly but surely—and emphasis on slowly here—the Securities and Exchange Commission has been issuing proposed and final rules on clawbacks, pay for performance, and the dreaded pay ratio rule.

Indeed, that slow pace of rulemaking has given companies and their boards time to plan for the new disclosures and even a chance to look ahead to compliance issues they might encounter.

The pay ratio rule, for example, was made final by the SEC in August and is the most controversial of all Dodd-Frank compensation disclosures. At its simplest, the rule requires companies to compare CEO compensation to the pay of the median employee and report that data as a ratio.

Corporate America originally feared that the pay ratio rule had an international scope that inaccurately pushed the ratio upward, and also complained about differences in cost of living among various countries and...

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