SEC’s Regulatory Agenda Puts Key Dodd-Frank Rules—Including Pay Ratio—in Limbo
The July 20 publication of the SEC’s Regulatory Agenda revealed a narrowed set of priorities for the agency, reflecting the deregulatory bent of the Trump administration. In a press briefing that same day, Mick Mulvaney, Director of the Office of Management and Budget, said the administration had already removed or withdrawn 860 regulatory actions from the previous administration.
The SEC’s agenda shows just 21 rules in the “proposed stage” and 12 in the “final stage.” None of them address pending matters of general concern to corporate executives—e.g., executive pay clawbacks, pay for performance or hedging disclosure; these have been put on indefinite hold. Also absent from the list was any mention of the requirement to disclose the ratio of median employee to CEO pay. The final pay ratio rule came out two years ago, August 5, 2015, followed by SEC guidance on October 18, 2016, but it has been under review since February 6, 2017. That was when Acting Chairman Michael Piwowar requested comments on the rule, which are still coming in. Of the more than 14,000 comments submitted so far, most are form letters from individuals with undisclosed affiliations expressing support for the rule. Given the uncertainty surrounding the pay ratio rule, companies should work with counsel to prepare to comply based on SEC guidance to date.
For a summary of the rule and SEC guidance, see this previous Ticker report.