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SEC approves CEO pay ratio rule

by Jeff Drew | Aug 06, 2015   ()

The SEC on Wednesday approved a new rule requiring U.S. public companies to disclose the ratio between their CEO’s compensation and that of their median employee.

The rule, passed in a 3–2 vote, implements Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, some five years after the law was passed. Companies will now be required to reveal the following:

  • The median of the total annual compensation of all their employees except the CEO.
  • The annual total compensation of the CEO.
  • The ratio of the two amounts.

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Source: Journal of Accountancy

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