SEC Finalises Pay Ratio Disclosure Requirements

On 5 August 2015, in a 3-2 vote of commissioners cast along party lines, the SEC released final rules implementing the pay ratio disclosure requirements of Section 953(b) of the Dodd-Frank Act. The final rules are largely consistent with the proposed rules issued by the SEC in September 2013, and will be codified as paragraph (u) to Item 402 of Regulation S-K. Foreign private issuers are exempt from these rules.

• Summary of Proposed Pay Ratio Disclosure Requirements
• The final rules establish a prescribed format for comparing the total compensation of the registrant's principal executive officer ("PEO") to the median compensation paid to the registrant's covered employees. New Item 402(u) of Regulation S K requires issuers to disclose: