SEC Guidance on CEO Pay Ratio Disclosure

Harvard Law School Forum on Corporate Governance and Financial Regulation, November 7, 2016

SEC Guidance on CEO Pay Ratio Disclosure

On October 18, the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) released five Compliance and Disclosure Interpretations (“C&DIs”) addressing new Item 402(u) of Regulation S-K regarding CEO pay ratio disclosure.

C&DIs 128C.01 through 128C.05 address five topics: (1) the identification of a “consistently applied compensation measure” to identify the median employee; (2) the use of hourly or annual rates of pay as a “consistently applied compensation measure;” (3) the time period(s) that may be used in applying a “consistently applied compensation measure;” (4) the treatment of furloughed employees; and (5) the circumstances under which a worker’s compensation will be deemed determined by an unaffiliated third party. In summary, the takeaways from the Staff’s new C&DIs are as follows:

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By |2019-03-05T09:41:29-05:00November 10th, 2016|Categories: News Watch|Tags: , , |Comments Off on SEC Guidance on CEO Pay Ratio Disclosure
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