Jenner & Block

Client Alert: Preparing for CEO Pay Ratio: Your Last Minute Guide

Over two years ago, the US Securities and Exchange Commission (the SEC) adopted rules implementing Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), creating an obligation for public companies to disclose the median of the annual total compensation of all employees (excluding the CEO), the annual total compensation of the CEO and the ratio of the median of the annual total compensation of all employees to the annual total compensation of the CEO.  At times during the past two years, it seemed that legislative or regulatory action might derail the final implementation of the rule, but as 2017 draws to a close it is now clear that proxy statements filed in 2018 will need to include the new CEO pay ratio disclosure.  This last minute guide to the disclosure requirement provides an overview of the rule and available SEC guidance, and discusses key considerations for issuers as they calculate the ratio and draft the disclosures required by the SEC rule.

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