--- title: Sullivan Blogs | SEC Pulse | pay ratio description: pay ratio | Sullivan's SEC Pulse blog provides updates and commentary from our Capital Markets Group on issues affecting publicly traded and privately owned businesses, investment banks and foreign companies who trade or raise capital in the United States, and boards of directors and company officers in securities transactions and corporate governance matters. --- ![SEC Pulse Header NEW-1](https://blog.sullivanlaw.com/hs-fs/hubfs/SEC%20Pulse%20Header%20NEW-1.jpg?width=943&name=SEC%20Pulse%20Header%20NEW-1.jpg "SEC Pulse Header NEW-1") ## [SEC adopts rule for pay ratio disclosure](https://blog.sullivanlaw.com/secpulse/sec-adopts-rule-for-pay-ratio-disclosure) Posted by [Howard Berkenblit](https://blog.sullivanlaw.com/secpulse/author/howard-berkenblit) on August 5, 2015 at 4:57 PM - [Tweet](https://twitter.com/share) As mandated by the Dodd-Frank Act, the SEC today adopted a rule that requires public companies to disclose the ratio of the compensation of its chief executive officer (CEO) to the median compensation of its employees. The new rule will require disclosure of the pay ratio in registration statements, proxy and information statements, and annual reports that call for executive compensation disclosure. Companies will be required to provide disclosure of their pay ratios for their first fiscal year beginning on or after January 1, 2017.  The SEC purports to address concerns about the costs of compliance by providing companies with flexibility in meeting the rule’s requirements. For example, a company will be permitted to select its methodology for identifying its median employee and that employee’s compensation, including through statistical sampling of its employee population or other reasonable methods. The rule also permits companies to make the median employee determination only once every three years and to choose a determination date within the last three months of a company’s fiscal year. In addition, the rule allows companies to exclude non-U.S. employees from countries in which data privacy laws or regulations make companies unable to comply with the rule and provides a *de minimis* exemption for non-U.S. employees. Companies would be required to briefly describe the methodology used to identify the median employee, and any material assumptions, adjustments (including cost-of-living adjustments), or estimates used to identify the median employee or to determine annual total compensation. If a company identifies a median employee based on a consistently applied compensation measure, it would be required to disclose the measure it used. Also, companies would be required to clearly identify any estimates used. The rule does not apply to smaller reporting companies, emerging growth companies, foreign private issuers, MJDS filers, or registered investment companies. The rule does provide transition periods for new companies, companies engaging in business combinations or acquisitions, and companies that cease to be smaller reporting companies or emerging growth companies. The adopting release for the rules appears [here](http://www.sec.gov/rules/final/2015/33-9877.pdf). The rules will be effective 60 days after publication in the Federal Register. 0 Comments [Click here to read/write comments](https://blog.sullivanlaw.com/secpulse/sec-adopts-rule-for-pay-ratio-disclosure#comments-listing) Topics: [Dodd-Frank](https://blog.sullivanlaw.com/secpulse/topic/dodd-frank), [pay ratio](https://blog.sullivanlaw.com/secpulse/topic/pay-ratio), [executive compensation](https://blog.sullivanlaw.com/secpulse/topic/executive-compensation) [All posts](https://blog.sullivanlaw.com/secpulse/all) [![Sullivan 4c](https://blog.sullivanlaw.com/hs-fs/hubfs/Sullivan%20logos/Sullivan%204c.png?width=220&name=Sullivan%204c.png "Sullivan 4c")](http://www.sandw.com) ### About the Blog --- The SEC Pulse provides updates and commentary from our Capital Markets Group on issues affecting publicly traded and privately owned businesses, investment banks and foreign companies who trade or raise capital in the United States, and boards of directors and company officers in securities transactions and corporate governance matters. *The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.* Search: Search Google ### Stay Connected --- ![facebook30x30.jpg](https://blog.sullivanlaw.com/hs-fs/hubfs/facebook30x30.jpg?width=25&name=facebook30x30.jpg "facebook30x30.jpg") **[Join us on Facebook](https://www.facebook.com/SullivanWorcester/?ref=hl)** ![linkedin-30x30-1.jpg](https://blog.sullivanlaw.com/hs-fs/hubfs/linkedin-30x30-1.jpg?width=25&name=linkedin-30x30-1.jpg "linkedin-30x30-1.jpg") **[Connect with us on LinkedIn](https://www.linkedin.com/company/sullivan-%26-worcester-llp?trk=company_logo)** ![twitter-bird-alone.jpg](https://blog.sullivanlaw.com/hs-fs/hubfs/twitter-bird-alone.jpg?width=25&name=twitter-bird-alone.jpg "twitter-bird-alone.jpg") **[Follow us on Twitter](https://twitter.com/SullivanLaw)** ### Subscribe to Blog ### Recent Posts ### Posts by Topic - [SEC (27)](https://blog.sullivanlaw.com/secpulse/topic/sec) - [Securities and Exchange Commission (22)](https://blog.sullivanlaw.com/secpulse/topic/securities-and-exchange-commission) - [SEC Filings (16)](https://blog.sullivanlaw.com/secpulse/topic/sec-filings) - [COVID-19 (9)](https://blog.sullivanlaw.com/secpulse/topic/covid-19) - [coronavirus (9)](https://blog.sullivanlaw.com/secpulse/topic/coronavirus) - [Dodd-Frank (8)](https://blog.sullivanlaw.com/secpulse/topic/dodd-frank) - [EDGAR (7)](https://blog.sullivanlaw.com/secpulse/topic/edgar) - [FAST Act (6)](https://blog.sullivanlaw.com/secpulse/topic/fast-act) - [Nasdaq (5)](https://blog.sullivanlaw.com/secpulse/topic/nasdaq) - [disclosure requirements (5)](https://blog.sullivanlaw.com/secpulse/topic/disclosure-requirements) - [the JOBS Act (5)](https://blog.sullivanlaw.com/secpulse/topic/the-jobs-act) - [Securities Exchange Act (4)](https://blog.sullivanlaw.com/secpulse/topic/securities-exchange-act) - [crowdfunding (4)](https://blog.sullivanlaw.com/secpulse/topic/crowdfunding) - [executive compensation (4)](https://blog.sullivanlaw.com/secpulse/topic/executive-compensation) - [public companies (4)](https://blog.sullivanlaw.com/secpulse/topic/public-companies) - [shareholder (4)](https://blog.sullivanlaw.com/secpulse/topic/shareholder) - [Form 10-K (3)](https://blog.sullivanlaw.com/secpulse/topic/form-10-k) - [GAAP (3)](https://blog.sullivanlaw.com/secpulse/topic/gaap) - [Registration Fees (3)](https://blog.sullivanlaw.com/secpulse/topic/registration-fees) - [Regulation A (3)](https://blog.sullivanlaw.com/secpulse/topic/regulation-a) - [Securities Act (3)](https://blog.sullivanlaw.com/secpulse/topic/securities-act) - [cybersecurity (3)](https://blog.sullivanlaw.com/secpulse/topic/cybersecurity) - [reporting requirements (3)](https://blog.sullivanlaw.com/secpulse/topic/reporting-requirements) - [Climate change (2)](https://blog.sullivanlaw.com/secpulse/topic/climate-change) - [Division of Corporation Finance (2)](https://blog.sullivanlaw.com/secpulse/topic/division-of-corporation-finance) - [Filing Rules (2)](https://blog.sullivanlaw.com/secpulse/topic/filing-rules) - [Filings (2)](https://blog.sullivanlaw.com/secpulse/topic/filings) - [Inline XBRL (2)](https://blog.sullivanlaw.com/secpulse/topic/inline-xbrl) - [Public Company Accounting Oversight Board (2)](https://blog.sullivanlaw.com/secpulse/topic/public-company-accounting-oversight-board) - [Regulation D (2)](https://blog.sullivanlaw.com/secpulse/topic/regulation-d) - [Regulation S-K (2)](https://blog.sullivanlaw.com/secpulse/topic/regulation-s-k) - [Rule 10b5-1 plans (2)](https://blog.sullivanlaw.com/secpulse/topic/rule-10b5-1-plans) - [Rule 10b5-1(c) (2)](https://blog.sullivanlaw.com/secpulse/topic/rule-10b5-1c) - [Section 13(d) (2)](https://blog.sullivanlaw.com/secpulse/topic/section-13d) - [Section 13(g) (2)](https://blog.sullivanlaw.com/secpulse/topic/section-13g) - [audit committee (2)](https://blog.sullivanlaw.com/secpulse/topic/audit-committee) - [clawback policies (2)](https://blog.sullivanlaw.com/secpulse/topic/clawback-policies) - [fraud (2)](https://blog.sullivanlaw.com/secpulse/topic/fraud) - [offering (2)](https://blog.sullivanlaw.com/secpulse/topic/offering) - [registration statements (2)](https://blog.sullivanlaw.com/secpulse/topic/registration-statements) - [virtual shareholder meetings (2)](https://blog.sullivanlaw.com/secpulse/topic/virtual-shareholder-meetings) - [ACH (1)](https://blog.sullivanlaw.com/secpulse/topic/ach) - [Accelerated Filing (1)](https://blog.sullivanlaw.com/secpulse/topic/accelerated-filing) - [Annual Reporting (1)](https://blog.sullivanlaw.com/secpulse/topic/annual-reporting) - [Automated Clearing House (1)](https://blog.sullivanlaw.com/secpulse/topic/automated-clearing-house) - [BEA (1)](https://blog.sullivanlaw.com/secpulse/topic/bea) - [CD&Is (1)](https://blog.sullivanlaw.com/secpulse/topic/cdis) - [CEO compensation (1)](https://blog.sullivanlaw.com/secpulse/topic/ceo-compensation) - [Climate-related financial risk (1)](https://blog.sullivanlaw.com/secpulse/topic/climate-related-financial-risk) - [Compliance & Disclosure Interpretations (1)](https://blog.sullivanlaw.com/secpulse/topic/compliance-disclosure-interpretations) - [Compliance Rules (1)](https://blog.sullivanlaw.com/secpulse/topic/compliance-rules) - [Concept Release (1)](https://blog.sullivanlaw.com/secpulse/topic/concept-release) - [Critical Audit Matters (1)](https://blog.sullivanlaw.com/secpulse/topic/critical-audit-matters) - [Department of Commerce (1)](https://blog.sullivanlaw.com/secpulse/topic/department-of-commerce) - [Disclosure Agreements (1)](https://blog.sullivanlaw.com/secpulse/topic/disclosure-agreements) - [Equifax (1)](https://blog.sullivanlaw.com/secpulse/topic/equifax) - [Exchange Act Rule 10b5-1(c)(1) (1)](https://blog.sullivanlaw.com/secpulse/topic/exchange-act-rule-10b5-1c1) - [Form 13F (1)](https://blog.sullivanlaw.com/secpulse/topic/form-13f) - [Form 144 (1)](https://blog.sullivanlaw.com/secpulse/topic/form-144) - [Form 8-K (1)](https://blog.sullivanlaw.com/secpulse/topic/form-8-k) - [Form AP (1)](https://blog.sullivanlaw.com/secpulse/topic/form-ap) - [Form BE-12 (1)](https://blog.sullivanlaw.com/secpulse/topic/form-be-12) - [Form S-1 (1)](https://blog.sullivanlaw.com/secpulse/topic/form-s-1) - [Form SR (1)](https://blog.sullivanlaw.com/secpulse/topic/form-sr) - [G/non-GAAP (1)](https://blog.sullivanlaw.com/secpulse/topic/g-non-gaap) - [Institutional Shareholder Services (1)](https://blog.sullivanlaw.com/secpulse/topic/institutional-shareholder-services) - [Issuers (1)](https://blog.sullivanlaw.com/secpulse/topic/issuers) - [Jumpstart Our Business Startups (1)](https://blog.sullivanlaw.com/secpulse/topic/jumpstart-our-business-startups) - [NYSE (1)](https://blog.sullivanlaw.com/secpulse/topic/nyse) - [New York Stock Exchange (1)](https://blog.sullivanlaw.com/secpulse/topic/new-york-stock-exchange) - [Non-GAAP (1)](https://blog.sullivanlaw.com/secpulse/topic/non-gaap) - [Proxy Voting Policies (1)](https://blog.sullivanlaw.com/secpulse/topic/proxy-voting-policies) - [Reg G (1)](https://blog.sullivanlaw.com/secpulse/topic/reg-g) - [Regulation 13D-G (1)](https://blog.sullivanlaw.com/secpulse/topic/regulation-13d-g) - [Regulation A exemption (1)](https://blog.sullivanlaw.com/secpulse/topic/regulation-a-exemption) - [Regulation FD (1)](https://blog.sullivanlaw.com/secpulse/topic/regulation-fd) - [Regulation S-X (1)](https://blog.sullivanlaw.com/secpulse/topic/regulation-s-x) - [Rule 10D-1 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-10d-1) - [Rule 10b-18 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-10b-18) - [Rule 144 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-144) - [Rule 3-05 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-3-05) - [Rule 3-14 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-3-14) - [Rule 504 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-504) - [Rule 506 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-506) - [Rule 701 (1)](https://blog.sullivanlaw.com/secpulse/topic/rule-701) - [SEC's Division of Corporation Finance (1)](https://blog.sullivanlaw.com/secpulse/topic/secs-division-of-corporation-finance) - [SRCs (1)](https://blog.sullivanlaw.com/secpulse/topic/srcs) - [Section filings (1)](https://blog.sullivanlaw.com/secpulse/topic/section-filings) - [Stock price volatility (1)](https://blog.sullivanlaw.com/secpulse/topic/stock-price-volatility) - [Tier 1 (1)](https://blog.sullivanlaw.com/secpulse/topic/tier-1) - [Tier 2 (1)](https://blog.sullivanlaw.com/secpulse/topic/tier-2) - [U.S. Securities Laws (1)](https://blog.sullivanlaw.com/secpulse/topic/u-s-securities-laws) - [accelerated filer (1)](https://blog.sullivanlaw.com/secpulse/topic/accelerated-filer) - [accredited investor (1)](https://blog.sullivanlaw.com/secpulse/topic/accredited-investor) - [auditor (1)](https://blog.sullivanlaw.com/secpulse/topic/auditor) - [board diversity (1)](https://blog.sullivanlaw.com/secpulse/topic/board-diversity) - [broker-dealer securities transactios (1)](https://blog.sullivanlaw.com/secpulse/topic/broker-dealer-securities-transactios) - [broker-dealer transactions (1)](https://blog.sullivanlaw.com/secpulse/topic/broker-dealer-transactions) - [company performance (1)](https://blog.sullivanlaw.com/secpulse/topic/company-performance) - [corporate social responsibility (1)](https://blog.sullivanlaw.com/secpulse/topic/corporate-social-responsibility) - [covid (1)](https://blog.sullivanlaw.com/secpulse/topic/covid) - [crowdfunding investment (1)](https://blog.sullivanlaw.com/secpulse/topic/crowdfunding-investment) - [eXtensible Business Reporting Language (1)](https://blog.sullivanlaw.com/secpulse/topic/extensible-business-reporting-language) - [emerging growth companies (1)](https://blog.sullivanlaw.com/secpulse/topic/emerging-growth-companies) - [engagement partner (1)](https://blog.sullivanlaw.com/secpulse/topic/engagement-partner) - [foreign entity (1)](https://blog.sullivanlaw.com/secpulse/topic/foreign-entity) - [general solicitation (1)](https://blog.sullivanlaw.com/secpulse/topic/general-solicitation) - [initial public offerings (1)](https://blog.sullivanlaw.com/secpulse/topic/initial-public-offerings) - [investor relations (1)](https://blog.sullivanlaw.com/secpulse/topic/investor-relations) - [median worker compensation (1)](https://blog.sullivanlaw.com/secpulse/topic/median-worker-compensation) - [offerings (1)](https://blog.sullivanlaw.com/secpulse/topic/offerings) - [pay ratio (1)](https://blog.sullivanlaw.com/secpulse/topic/pay-ratio) - [pay ratio disclosure requirement (1)](https://blog.sullivanlaw.com/secpulse/topic/pay-ratio-disclosure-requirement) - [proxy rules (1)](https://blog.sullivanlaw.com/secpulse/topic/proxy-rules) - [public float (1)](https://blog.sullivanlaw.com/secpulse/topic/public-float) - [qualified purchasers (1)](https://blog.sullivanlaw.com/secpulse/topic/qualified-purchasers) - [question 102.10 (1)](https://blog.sullivanlaw.com/secpulse/topic/question-102-10) - [risk management (1)](https://blog.sullivanlaw.com/secpulse/topic/risk-management) - [scaled disclosure accommodations (1)](https://blog.sullivanlaw.com/secpulse/topic/scaled-disclosure-accommodations) - [securities (1)](https://blog.sullivanlaw.com/secpulse/topic/securities) - [share repurchase plans (1)](https://blog.sullivanlaw.com/secpulse/topic/share-repurchase-plans) - [smaller reporting company (1)](https://blog.sullivanlaw.com/secpulse/topic/smaller-reporting-company) - [universal proxy cards (1)](https://blog.sullivanlaw.com/secpulse/topic/universal-proxy-cards) see all - [Home](https://www.sullivanlaw.com/) - [Terms of Use](http://www.sullivanlaw.com/disclaimer.html) - [Legal Notices](http://www.sullivanlaw.com/legalnotice.html) - [Cookie Policy](http://www.sullivanlaw.com/cookiepolicy.html) - [Privacy Policy](http://www.sullivanlaw.com/privacypolicy.html) - [Attorney Advertising](https://www.sullivanlaw.com/attorney-advertising) © 2025 Sullivan & Worcester. Sullivan & Worcester is an international entity operating through various separate and distinct legal entities. For further information about these entities and Sullivan & Worcester’s structure, please refer to the Legal Notices page of this website. All rights reserved.