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SEC to Offer Interpretive Guidance on Pay Ratio Disclosures

To prepare companies for complying with the pay ratio disclosure requirements early next year, the Securities and Exchange Commission (“SEC”) recently approved new interpretive guidance. The interpretive guidance outlines the market regulator’s views regarding the use of reasonable estimates, assumptions and methodologies, and statistical sampling as allowed by the pay ratio rule. In addition, the guidance clarifies that companies can use applicable existing internal records (e.g., tax or payroll records) when determining whether to include non-U.S. employees and identifying the median employee. It also offers guidance concerning when a company can use widely recognized tests in determining whether its workers. Read More.

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