Five Developments To Follow In 2014 - Pay-Ratio Disclosure

In accordance with the U.S. Dodd-Frank Act, the Securities and Exchange Commission introduced proposed rules in September 2013 to provide for new "pay ratio disclosure" obligations. According to the proposal, every public company would be required to disclose the ratio of the compensation of its principal executive officer (PEO) to the median compensation of its employees in any filings that mandate executive compensation disclosure, such as annual reports, registration statements, and proxy and information statements. Companies would be able to disclose the information either as a ratio or expressed narratively by referring to the multiple that the PEO total compensation amount bears to the median of the annual total compensation amount.