On September 18, 2013, the Securities and Exchange Commission (the “SEC”) approved by a three-to-two vote proposed rules (the “Proposed Rules”) implementing Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd Frank Act”). The Proposed Rules would amend Item 402 of Regulation S-K to require disclosure of (i) the median of the annual total compensation of all employees of the issuer (excluding the chief executive officer) (the “CEO”); (ii) the annual total compensation of the CEO (or equivalent position); and (iii) the ratio of the median disclosed to the annual total compensation of the CEO. The disclosure would be required in any annual report, proxy statement or registration statement that would otherwise require executive compensation disclosure under Item 402 of Regulation S-K.

Public comments on the Proposed Rules must be received within the 60-day period following the Proposed Rules’ publication in the Federal Register. The new pay ratio disclosure would be required for a company’s first full fiscal year commencing on or after the effective date of the final rules. Therefore, if the rules become effective during 2014,the disclosure will first be required for the fiscal year ending 2015. Emerging growth companies, smaller reporting companies and foreign private issuers would be exempt from the pay ratio disclosure requirements. This Client Alert summarizes the material features of the Proposed Rules and the key issues that public companies should begin to consider in preparation for compliance.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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