Proposed SEC Rule To Require Pay Comparison Between CEO and Median Employee

On Wednesday, the commissioners for the U.S. Securities and Exchange Commission voted 3-2 to propose a rule that requires U.S. public companies to disclose the ratio between the pay of their CEOs and their median employees. This was a mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203.

It is a matter of controversy whether this additional information will be helpful to the investor, but the rule was written by the SEC to provide companies with the greatest amount of flexibility in making the calculation.