A rule proposed Wednesday by the SEC would require U.S. public companies to disclose the ratio between what companies pay their CEOs and their median employee.
SEC commissioners voted 3–2 to propose the rule, which was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203.
If the rule is approved, companies would be required to disclose:
- The median of the total annual compensation of all their employees except the CEO.
- The annual total compensation of the CEO.
- The ratio of the two amounts.
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Source: Ken Tysiac, http://www.journalofaccountancy.com
