On September 21, 2017, the U.S. Securities and Exchange
Commission (SEC) released several items that provide additional
guidance on the CEO Pay Ratio Rule (the "Rule"):
(1) SEC interpretive
guidance;
(2) Revised pay ratio Compliance and Disclosure
Interpretations (C&DIs) reflecting the SEC's
interpretive guidance; and
(3) A separate guidance released by the
staff of the SEC's Division of Corporation Finance.
The additional guidance confirmed that the SEC does not plan to
postpone the effective date of the Rule. This means that
calendar-year public companies must be ready to disclose their pay
ratio in their 2018 proxy statements as has been contemplated.
However, the new guidance should simplify a public company's
ability to comply with the Rule in a more cost effective way by
permitting the exclusion of independent contractors from such
calculation, the use of records already generated by the public
company in identifying the median employee and the expanded
