Today, the Securities and Exchange Commission issued a final rule requiring most U.S. companies to report CEO compensation in relation to the median annual total compensation of all other employees.
The rule is subject to a surprisingly long implementation lag, with disclosure first being required for fiscal years beginning on or after January 1, 2017. Accordingly, we do not expect to see proliferation of pay ratio disclosure until early 2018. In the meantime, there are some immediate insights to consider as you begin preparing for pay ratio disclosure.