The rules will be effective 60 days after publication in the Federal Register.
# # # The Securities and Exchange Commission will consider whether to adopt a rule requiring public companies to disclose the ratio of the annual total compensation of the chief executive officer (CEO) to the median of the annual total compensation of the company’s employees.
This may be true; films like Manhattan certainly come along far too infrequently.A company also would be permitted to identify its median employee once every three years unless there has been a change in its employee population or employee compensation arrangements that it reasonably believes would result in a significant change to its pay ratio disclosure.Also, within those three years, if the median employee’s compensation changes, the company may use another employee with substantially similar compensation as its median employee.A company would be required to calculate the annual total compensation for its median employee using the same rules that apply to the CEO’s compensation.“Annual total compensation” means total compensation for the last completed fiscal year, calculated using the definition of “total compensation” in existing executive compensation rules, namely Item 402(c)(2)(x) of Regulation S-K.As with the city itself, the memories of this film will stay with you forever.The Securities and Exchange Commission today adopted a final rule that requires a public company to disclose the ratio of the compensation of its chief executive officer (CEO) to the median compensation of its employees.Subject to certain exceptions, the company would be required to include all employees – U. Individuals employed by unaffiliated third parties or independent contractors would not be considered to be employees of the company. In contrast, full-time equivalent adjustments for part-time workers and annualizing adjustments for temporary and seasonal workers would not be permitted when calculating the required pay ratio.Companies would be required to briefly describe the methodology used to identify the median employee, and any material assumptions, adjustments (including cost-of-living adjustments), or estimates used to identify the median employee or to determine annual total compensation.The rule, which is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, would provide investors with information to consider when assessing CEO compensation, while providing companies with substantial flexibility in calculating the ratio.To identify the median employee, the rule would allow companies to select a methodology based on their own facts and circumstances.