Two men share securities regulation news

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Securities Regulation Daily, February 6, 2017

Acting Chair Piwowar seeks comments on pay ratio compliance, implementation

By Mark S. Nelson, J.D.

Acting SEC Chairman Michael Piwowar requested public comments on the Commission’s pay ratio disclosure rule with respect to unexpected compliance woes and on implementation of the rule. Comments are due within 45 days. The announcement marks the second time in less than a week that the acting chairman has pushed for reconsideration of a Commission rule.

Piwowar cited issuers’ "unanticipated compliance difficulties" that had come to his attention as the basis for reconsidering the pay ratio rule. He said companies’ testing of controls and other systems needed to comply with the rule could impact whether they meet the deadline for reporting. But Piwowar also directed SEC staff to reconsider the rule’s implementation with an eye to whether new guidance or relief may be needed. Piwowar urged both SEC staff and the public to "expedite" their separate reviews due to the short compliance timeframe, which is set to start with the first fiscal year beginning on or after January 1, 2017.

Dodd-Frank Act Section 953(b) directed the Commission to amend Item 402 of Regulation S-K to require issuers to disclose their ratios of the median of the annual total compensation of all employees to the annual total compensation of their CEOs. The Commission adopted the final version of the rule in August 2015 with some but not all requested changes, yet not enough to garner support from then-Commissioner Piwowar and Commissioner Daniel Gallagher, both of whom dissented from the vote by the fully-appointed Commission. Since then, the Division of Corporation Finance has published Compliance & Disclosure Interpretations in an effort to clarify how parts of the rule can be applied in practice.

Last week, Piwowar directed the agency to reconsider existing guidance and relief under the Commission’s conflict minerals rule while also inviting public comments. And on a related front, Congress recently disapproved the Commission’s resource extraction issuers rule via a joint resolution under the Congressional Review Act. The White House has expressed support for the resolution and the president is expected to sign it.

MainStory: TopStory CorporateFinance CorporateGovernance CorpGovNews GCNNews DirectorsOfficers DoddFrankAct ExecutiveCompensation FormsFilings PublicCompanyReportingDisclosure TrumpAdministrationNews

Back to Top

Securities Regulation Daily

Introducing Wolters Kluwer Securities Regulation Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.

A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.