Securities Update - September 2013

SEC Finally Proposes Pay Ratio Disclosure Rule
By Troy M. Calkins and Rachel M. Krol

Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted on July 21, 2010, requires the Securities and Exchange Commission to amend Item 402 of Regulation S-K to require disclosure of the median of the total annual compensation of all employees of an issuer (excluding the chief executive officer), the annual total compensation of that issuer's chief executive officer and the ratio of the median of the total annual compensation of all employees of an issuer (excluding the chief executive officer) to the annual total compensation of that issuer's chief executive officer. This provision of the Dodd-Frank Act has caused great anxiety for many public companies over the last three years. Companies have expressed much concern that the rule required by Section 953(b) would be extremely burdensome, imposing difficult and expensive recordkeeping