Alert September 24, 2013

SEC Proposes Pay Ratio Disclosure Requirements

By a 3-2 margin, the SEC voted to issue a proposal that would amend Item 402 of Regulation S-K to require an issuer to disclose (1) the median of the annual total compensation of all its employees other than its CEO, (2) the annual total compensation of its CEO, and (3) the ratio of the two.  The proposed disclosure would appear in annual reports, proxy or information statements, and registration statements that are required to include Item 402 executive compensation disclosure.  The proposal is designed to fulfill a rulemaking mandate under Section 953(b) of the Dodd‑Frank Act.  The proposed requirements would not apply to emerging growth companies, smaller reporting companies, foreign private issuers, or registered investment companies.  Comments on the proposal may be submitted no later than 60 days after it appears in the Federal Register.