SEC Staff Issues Guidance On Pay Ratio Disclosure Rules

The staff of the Securities and Exchange Commission's Division of Corporation Finance (the staff) issued new compliance and disclosure interpretations (C&DIs) on October 18, 2016, providing guidance to companies preparing to comply with the pay ratio disclosure rules adopted in 2015. The pay ratio disclosure rules will require publicly-traded companies to disclose the ratio of median compensation of all employees to the compensation of the principal executive officer for full fiscal years, beginning on and after January 1, 2017. The five new C&DIs provide guidance on three aspects of identifying the median employee for purposes of calculating the pay ratio.

What qualifies as a "consistently applied compensation measure" that may be used to identify the median employee?