“Texas Attorneys Discuss Newly Adopted SEC Pay Ratio Disclosure Rules and Address O&G Clients’ Concerns”
The U.S. Securities and Exchange Commission adopted this month long-debated pay ratio disclosure rules, which Congress had included as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The new rules go into effect Oct. 19, but companies won’t have to comply with them until Jan. 1, 2017. At that point, the new rules will require public companies to disclose the CEO’s annual compensation, the company’s employees’ median compensation, and a ratio comparing the two. Texas Lawyer asked three Texas lawyers who advise the O&G industry to respond to questions about the SEC’s new rules.
Below are their answers, edited for length and style.
Texas Lawyer: What has been the rate of client inquiries regarding the pay ratio disclosure rules mandated by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, adopted this month by the Securities Exchange Commission?
Amy Curtis, partner, Thompson & Knight, Dallas: We have had questions from clients about the pay ratio disclosure rules ever since the Dodd-Frank Act was adopted in 2010 mandating the SEC to implement the pay ratio rules; however, given that public companies have known these rules were coming since 2010, as well as the fact that for most companies, disclosure will not be required until 2018, clients generally haven’t been overly concerned about the SEC’s adoption of final rules in early August. I think companies realize they have a little time to absorb the details of the rules and begin working on the necessary calculations and disclosure.