No Dodd-Frank repeal means companies on the hook for CEO pay ratio
- Companies that thought they may get a reprieve on the CEO-to-worker pay ratio reports thanks to the Trump administration may not get that break after all, The Washington Post reports. A bill set to repeal Dodd-Frank, under which the reports are mandated, has stalled in Congress and likely won't see much motion, the Post says.
- Preoccupation with healthcare and tax-reform proposals might be preempting Republicans' repeal of any Dodd-Frank provisions.
- Companies are calculating pay ratios, as the law currently requires, by Oct. 1 or before the year's end, the Post says, to avoid getting stuck in the busy benefits season.
House Republicans passed the Financial Choice Act in June, which was to relax banking regulations and repeal Dodd-Frank, but Senate members showed little interest in the law. Any real change this year appears unlikely. Some companies are clamoring for help in meeting the deadline.
An updated survey by Mercer shows that 80% of respondents are struggling to comply with the SEC's CEO pay ratio rule, partly driven by uncertainty of how to complete the requirements.
In the meantime, employers need to comply with Dodd-Frank and not wait until Congress might act to submit their reports. Willis Towers Watson recommended a six-point plan that simplifies the pay-ratio calculation, which it forwarded to the SEC in March. The plan calls for narrowing the definition of “employee” and “employee of the registrant,” using prior-year data to identify workers and allowing employers to use base pay as a consistently applied compensation measure (CACM).