SEC Issues Updated Guidance on Pay Ratio Disclosure
On September 21, 2017, the Securities and Exchange Commission (the "SEC") released updated interpretive guidance with respect to the pay ratio disclosure requirement codified in Item 402(u) of Regulation S-K, while the staff of the SEC’s Division of Corporation Finance issued revised Compliance and Disclosure Interpretations ("C&DIs") related to the pay ratio requirement. In addition, the SEC staff separately issued new guidance with respect to use of statistical sampling and other methods in determining a company’s "median employee" under the pay ratio rule. On the whole, the updated guidance suggests that the SEC, concerned with companies’ cost of compliance, is eager to provide registrants additional flexibility in determining how to comply with the pay ratio requirement.