The Securities and Exchange Commission will soon thrust CEO compensation back into the spotlight when it proposes a long-delayed rule requiring companies to disclose the pay gap between chief executives and rank-and-file employees, The Wall Street Journal reported today. The requirement, a mandate of the Dodd-Frank Act, could put added pressure on corporate boards to slow pay increases for CEOs at companies with significant or growing gaps. The rule, expected to be approved by the SEC as early as next month, has come under fire from corporations. But it is expected to be less onerous than what lawmakers originally ordered the SEC to adopt. Rather than surveying the entire workforce, the SEC is expected to allow companies to consider a fraction of their employees when calculating median pay. It is not clear what percentage of the workforce would be included in the sample. Companies would have to disclose the ratio between CEO compensation and the median pay of the sampled employee group. The proposal is meant to resolve concerns of large multinational companies that have complained that tallying pay for a far-flung, global workforce is prohibitively expensive.
