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As Pay Ratio Enters Its Third Year, Here’s What We Know So Far

To date, no company has won or lost vote support as a result of their pay ratio disclosures. With proxy advisory firms remaining silent on this issue so far, we don’t expect that to change.

Most companies listed in the United States are disclosing their CEO pay ratio for the third year and, so far, the disclosure has largely been a sleeper issue. Nevertheless, in this article we share insights on disclosure issues that companies must consider in order to remain in compliance with the letter and spirit of the rule; observations concerning median employee compensation (the only new piece of information produced by the rule); and examine an emerging activist campaign that, despite its relative lack of impact to-date, could potentially change the direction of pay ratio disclosures in the future.

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