The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) created significant financial regulatory changes. The legislation was passed by Congress and signed into law by President Obama in July 2010.
It comprises 848 pages and contains more than 90 provisions covering a broad range of topics, including executive compensation and corporate governance. Equilar has compiled a range of resources to help you understand the various provisions of Dodd-Frank.
On August 5, 2015, the SEC voted 3-2 to adopt the CEO pay ratio rule, effective January 2017. This rule requires companies to disclose the ratio of the total annual pay of their Chief Executive Officer to the median pay of the company’s employees, applicable to most public companies that file in the United States. Companies outside of the U.S and emerging growth companies (<$1B in revenue) are exempt.
Read more about Dodd-Frank on our Research Blog.
Today, it is imperative for companies to consider and understand how compensation models will be evaluated by government entities, institutional investors, and the public. Our governance solutions within Equilar Insight supplies companies with powerful tools to analyze, measure, and prepare for how pay strategies will be viewed by these critical stakeholders.
The adoption of the CEO-to-median-worker pay ratio rule by the SEC brings to the forefront the discussion about pay equity. Although most companies do not consider the median worker’s pay when setting the chief executive’s pay, comparison among top-level executives factors into the decisions of many compensation committees.
Equilar analyzed the ratio of CEO pay to that of the 15 highest paid individuals at 289 companies in the S&P 500 using data from its Executive Compensation Survey
Read more about the analysis of internal pay equity, along with other interesting research insights, in our new Research Blog.
In 2011, the Say on Pay provision of the Dodd-Frank Act became effective. It requires companies to institute a non-binding shareholder vote to approve executive compensation at least once every three years.
Equilar’s Say on Pay Tracker provides relevant Say on Pay information including voting results over the past three years.