August 1, 2021

Volume XI, Number 213

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July 30, 2021

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July 29, 2021

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SEC’s New Pay Ratio Disclosure Rule Explained

On August 5, 2015, the Securities and Exchange Commission adopted, by a three-to-two vote, a rule that will require most public companies to disclose, annually, the ratio of the median of the annual total compensation of the company’s employees to the annual total compensation of the company’s principal executive officer. Companies must comply with the pay ratio rule for the first fiscal year beginning on or after January 1, 2017. As a result, companies with December 31 fiscal years will first be required to provide pay ratio disclosure, for the 2017 fiscal year, in their proxy statements for their 2018 annual meeting of shareholders.

© 2021 Covington & Burling LLPNational Law Review, Volume V, Number 222
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About this Author

Richard Shea, employee benefits attorney, Covington
Partner

Richard Shea is chair of Covington’s Employee Benefits and Executive Compensation practice. Mr. Shea is widely regarded as the nation’s leading authority on cash balance, pension equity, and other complex benefit plan designs. His practice spans the full breadth of activities needed to help his clients resolve novel, sensitive, or intractable issues. His approach focuses on developing important new legal insights and ideas, and then combining them into effective litigation, legislative, regulatory, and benefit design strategies for his clients. The representative matters...

202-662-5599
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