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SEC Revisits Pay Ratio Rule

Acting Chairman Piwowar says review was prompted by complaints.

By Ben Bain, Bloomberg | Updated on February 07, 2017

A Dodd-Frank Act requirement that companies disclose how top executives’ compensation compares with pay for rank-and-file employees will get fresh scrutiny at the U.S. Securities and Exchange Commission after the agency’s acting chairman requested a review Monday.

Michael Piwowar, who as a commissioner opposed the rule when it was approved in 2015, said he was re-opening public comment on the pay-ratio rule in response to complaints that some companies “have begun to encounter unanticipated compliance difficulties.” The move offers no immediate relief for firms required to comply starting this year, but it could be a first step to ultimately changing the rule, which was included in Dodd-Frank amid claims that executive pay incentives fueled excessive risk before the 2008 financial crisis.

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