US firms will have to tell investors how many times more the chief executive officer earns than the median employee, under new rules adopted by US securities regulators, Reuters reported.
The Securities and Exchange Commission’s final rules give companies some flexibility in calculating the median pay.
For instance, they can exclude 5 percent of their overseas workers when arriving at the number and can use statistical sampling.
Only large and mid-sized firms will need to comply with the disclosure rule.
Corporate trade groups are widely expected to file a legal challenge.
Companies will have to start reporting the new pay ratios in the first fiscal year beginning on or after Jan. 1, 2017.
– Contact us at [email protected]