After the 2008 financial meltdown, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) was enacted to reform our crumbling financial services industry. After languishing for several years because of hastily drafted imprecise wording, The Wall Street Journal reports that a requirement of the Act may soon be taking effect: disclosing the gap between CEO compensation and “rank-and-file employees.” (Subscription only).
The Washington Post reports that Mary Jo White, SEC Chairwoman hopes the rule will be finished by September and stated: “We are very much as a staff and commission focused on that rule-making.”
So what does this mean for your company?
Many critics of the rule say that it will be costly and burdensome to carry out. Presumably, the delay in drafting the law has arisen out of the need to find something that could be easily executed across the board.
Based on Chairwoman White’s statements, we can expect to see a new rule in September. It may be wise to get a team together on this to formulate a plan on how to comply with the rule. Having the legal team meet up with human resources and finance seems like a good place to start. Having everyone on the same page at the initial phase will make it much easier to put a plan in place.
The best kind of preparation is, well, to be prepared.
Related Resources:
- Dodd-Frank Inc.: Debevoise Charges Bank $100K for 17-Page Letter (FindLaw’s Greedy Associates Blog)
- New Whistleblower Law: No Internal Reporting Needed for Reward (FindLaw’s In House Blog)
- How to Get Whistleblowers to Come to You Instead of the SEC (FindLaw’s In House Blog)
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