Additional Flexibility for Upcoming CEO Pay Ratio Compliance

16 October 2017
View Client Update

Key Takeaways

  • New SEC guidance gives issuers additional flexibility to comply with CEO pay ratio disclosure rules.
  • There is now more support from the SEC for using reasonable estimates and methodologies. For example, an issuer may use existing internal records, even if they do not include every compensation element, to identify its median employee and to determine whether non-US employees can be excluded from its pay ratio calculation. In addition, there is no risk of SEC enforcement action if an issuer’s pay ratio disclosure is reasonable and provided in good faith.
  • Proxy season is right around the corner. Now is the time for issuers to calculate and prepare to disclose their pay ratios.