SEC Issues Proposed Pay Ratio Rules

On September 18, 2013, the SEC voted 3 to 2 in favor of proposed "pay ratio" rules ^[1], which require each registrant to disclose the median of the annual total compensation of all of its employees (the MATC), the annual total compensation of its principal executive officer (PEO), and the ratio of the MATC to the annual total compensation of its PEO. The SEC proposed the amendments to implement Section 953(b) of the Dodd-Frank Act and is seeking comments on various points of the proposed rules. Should the rules be adopted as proposed, each registrant would be required to disclose the information in its annual reports on Form 10-K and in each proxy or information statement or registration statement that requires executive compensation disclosure pursuant to Item 402 of Regulation S-K.