Guidance clarifies how to determine the employee population and median employee for the ratio, though questions remain.
The staff of the Division of Corporation Finance of the Securities and Exchange Commission (SEC) has issued new guidance on the SEC’s rules requiring companies to disclose the pay ratio between their CEO and median compensated employee. The staff’s new Compliance and Disclosure Interpretations provide helpful clarity on how to determine the relevant employee population and the median employee for purposes of the ratio, although questions remain.
