Reminder: Issuers Should Prepare for Compliance with SEC’s Pay Ratio Rule
In August of 2015, the Securities and Exchange Commission (“SEC”) adopted a final rule, as directed by the Dodd-Frank Act, that requires reporting companies to disclose the median of the annual total compensation of all company employees other than the company’s chief executive officer (“CEO”), the CEO’s annual total compensation and the ratio between these two numbers. With the start of the new year, calendar-year issuers should take note that they will be required to disclose next year their pay ratio for the 2017 fiscal year.