I provided insight in a recent Law360 article on the CEO pay ratio disclosure requirements mandated by the Dodd-Frank Act. The disclosure requires that public companies disclose the compensation of its chief executive and its median average employee, as well as the ratio between the two. Companies will soon have to comply by disclosing the pay gap for fiscal 2017 in their annual 10-K reports and in their 2018 proxy statements.
While the rule may seem straightforward, the disclosure requirement has drawn many questions for companies – especially concerning how they can be sure they are accurately identifying their median employee and properly calculating their compensation. This task alone will be challenging for businesses with complex structures, especially global companies that have a diverse employee network dispersed across many countries.
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