October 04, 2013
The SEC's proposed pay ratio rule was published in the Federal Register this week, officially starting the 60-day comment period, and it will be essential for companies to assess the implications of the proposal and provide the Association with qualitative and cost information on the burden of implementation. So far, we have been hearing mixed reviews from companies. In order to prevent the final rule from getting even more complex and to make it easier for companies to comply, our Center On Executive Compensation is developing a cost and compliance survey of all HR Policy member companies, the results of which will be included in the comments to the SEC. To discuss the survey and different approaches being considered by companies so far, we will hold a conference call discussion at 11 a.m. EDT on Thursday, October 10. To register, click here. As the Center has argued repeatedly in the past, the details are important in assessing compliance, and many questions are being raised about the purported flexibility provided by the Commission and the practical implications for large companies, especially those with broad global operations. Meanwhile, in a speech to Fordham Law School yesterday, SEC Chair Mary Jo White stated that Congressional mandates such as pay ratio and conflict minerals "seem more directed at exerting societal pressure on companies to change behavior, rather than to disclose financial information that primarily informs investment decisions." She stated that while such objectives may be laudable, "as the Chair of the SEC, I must question, as a policy matter, using the federal securities laws and the SEC’s powers of mandatory disclosure to accomplish these goals."