On February 6, 2017, Acting SEC Chairman Michael Piwowar issued a statement instructing the SEC staff to reconsider the implementation of the SEC’s “pay ratio” rule based on any comments submitted and to determine as promptly as possible whether additional guidance or relief may be appropriate. Chairman Piwowar also opened a 45-day public comment period seeking input on any unexpected challenges that public companies have experienced as they prepare for compliance with the rule and whether relief is needed.
Most public companies will be required to begin reporting on “pay ratio” information in 2018 based on pay practices during the 2017 fiscal year. Many of our clients in the retail industry have experienced various difficulties with collecting the data necessary to make the SEC’s required disclosures, in particular with respect to their compliance with data privacy rules outside the United States for employees working abroad whose personal information must be included in the necessary computations. Affected retailers who wish to comment on the impact of the rule and their experiences with its implementation now have a formal mechanism to do so.