On September 18, the Securities and Exchange Commission (SEC) voted to propose a new rule that would require public companies to disclose the ratio of its CEO pay to the median annual total compensation of its employees. Required under the Dodd-Frank Act, the new rule wouldn’t specify a methodology for companies to use in calculating the ratio, leaving them flexibility to determine the median of its employees in a way that best suits its particular circumstances.
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The proposal will have a 60-day public comment period following its publication in the Federal Register.
The text of the proposed rule, available on the SEC’s website, can be found here.