SEC Finalizes CEO Pay Ratio Rules

As noted in this McGuireWoods alert, the SEC recently finalized the CEO pay ratio disclosure requirements under Section 953(b) of the Dodd Frank Act. The biggest piece of news in connection with the final rules is the delayed effective date. Calendar year issuers will not have to comply with the new rules until their first annual report or proxy filing made in 2018. That should give folks plenty of time to digest some of the changes the SEC has made to the original proposal, summarized below:

• Limited Exclusion of Non-U.S. Employees: Issuers will be allowed to exclude non-U.S. employees if either (i) foreign data privacy laws or regulations make issuers unable to comply with the final rule, despite their reasonable efforts, or (ii) non-U.S. employees account for 5 percent or less of the issuer's total U.S. and non-U.S. employees, with certain limitations.