The NASPP Blog

Back in February, it seemed like repeal of the CEO pay ratio disclosure was only a matter of time and that when it goes, it might take a lot of the rest of Dodd-Frank with it (see “More Challenges to Dodd-Frank,” February 9). But now the GOP’s push for a repeal seems to be losing steam.

Piwowar’s Request for Comments

As I noted on February 9, SEC Chairman Piwowar has requested comments from companies that have encountered unexpected challenges in implementing the CEO pay ratio. Comments are posted to the SEC’s website as they are received: so far, the SEC has received over 60 individual comment letters and a form letter (of which there have been over 3,000 submissions). The overwhelming majority of comments, including the over 3,000 form letters, are opposed to a further delay in the implementation of the rule. Given the veritable wealth of information on executive pay that is included in the proxy, it is surprising to me that anyone feels they need to know the ratio of CEO to median employee pay to figure out that CEOs are overpaid but apparently a lot of people really do want to know this. Go figure.

If you have encountered challenges (expected or unexpected) in preparing for the disclosure, now is a good time to tell the SEC about them. Comments are due by March 23 but, in my experience, most governmental agencies will still consider comments received after the deadline. If you are interested in reading about the challenges other companies have encountered, check out the letters from Borg Warner Flushing Financial, Stein Mart, and Finish Line.

Not a Priority?

Trump’s executive order requiring review of all “existing laws, treaties, regulations, guidance, reporting and recordkeeping requirements, and other Government policies” seemed to target Dodd-Frank along with other legislation (see “Dodd-Frank Under Scrutiny“). But, as reported in an article on Bloomberg (“Dismantling Dodd-Frank May Have to Wait“), repeal of Dodd-Frank was notably absent from Trump’s priority-setting speech to Congress on February 28.

Financial Choice Act a Long Shot

The Bloomberg article also noted that there is significant opposition to the Financial Choice Act. This act would repeal or weaken much of Dodd-Frank, but one analyst quoted in the article gives it only a 10-20% chance of passing.

It’s Not Over Until the Secretary of the Treasury Sings

The Executive Order calling for a review of all existing laws, regulations, etc. also requires the Secretary of Treasury and the Financial Stability Oversight Council to report their findings to the Administration by early June. Until then, there’s still a chance the rule may be delayed or repealed.

– Barbara