Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) requires certain public companies to disclose how the compensation of the company’s chief executive officer (“CEO”) compares to the compensation of employees generally. The disclosure must include (i) the CEO’s annual total compensation, (ii) the median of the annual total compensation of all employees other than the CEO, and (iii) the ratio of (i) over (ii).
Like many of Dodd-Frank’s requirements, disclosure of the CEO pay ratio was not required until implementing regulations were issued. On September 18, 2013, the U.S. Securities and Exchange Commission (“SEC”) published the applicable proposed regulations.
For more information, see the Client Alert from our Executive Compensation colleagues here.