Executive Compensation-SEC Adopts Rule For Pay Ratio Disclosure

In Press Release 2015-160 (Washington D.C., Aug. 5, 2015), the Securities and Exchange Commission (the “SEC”) says that it has adopted a final rule that requires a public company to disclose the ratio of the compensation of its chief executive officer (the “CEO”) to the median compensation of its employees. According to the Press Release, the new rule, which is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, provides companies with flexibility in calculating this pay ratio, and helps inform shareholders when voting on “say on pay.”

The Press Release includes a Fact Sheet, which explains the new rule.