SEC Proposes Pay-Ratio Disclosure Rules

On Sept. 18, 2013, the Securities and Exchange Commission (SEC) proposed long-delayed rules (the Proposed Rules) implementing the controversial chief executive officer (CEO) "pay-ratio" disclosure requirement under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act). Section 953(b) of the Act requires each public company (other than an emerging growth company) to disclose:

• the median annual total compensation of all employees (other than the CEO) ("A");
• the CEO's annual total compensation ("B"); and
• the ratio of A to B.

The disclosure will be made under Item 402 of Regulation S-K in annual proxy statements, annual reports and registration statements. The text of the Proposed Rules can be found here.