- The Securities and Exchange Commission gave some guidance about the upcoming, controversial pay-ratio rule that requires public companies to disclose the ratio of their CEO's pay to the median of other employees' pay, Bloomberg BNA reports.
- The guidance reveals that companies will have some leeway in calculating median pay. The Division of Corporate Finance said that an employer doesn't need to calculate annual total compensation, but can use "any measure that reasonably reflects its employees' annual compensation," BNA reports.
- The U.S. Chamber of Commerce will not challenge the pay-ratio rules, at least not yet — going against many employer expectations.
This guidance is yet another step of assurance for HR departments, as the rule also allows for the calculation to take place every three years. Regardless, the rule will remain a good amount of work for HR departments, particularly for this first calculation.
As of late, studies have thrown into question whether employees care about how much their CEO makes. Glassdoor research on CEO-to-worker pay ratios has shown, on average, that CEOs earn 204 times the median pay of their workers — and that when CEOs are paid more, employees tend to approve of them less. But analysis from Mercer and Payscale revealed that employees might not care or know about their CEO's compensation.