March 23, 2017
Thank you for the opportunity to provide commentary regarding the CEO Pay Ratio rule. We have worked over the last year to complete preparation activities and test analytics to ensure we are ready to publish our Pay Ratio in line with current planned reporting timing requirements. As we have worked through planning and preparation activities, weve identified several areas that present a significant challenge and require a great deal of manual effort and cost to complete, including the following:
Definition of employee for purposes of the Pay Ratio Calculation:
The requirement to include certain independent contractors in the ratio calculation.
The requirement to include employees who are a part of certain types of consolidated subsidiaries (such as joint ventures) in the ratio calculation.
Both of the above-mentioned worker types are typically not captured in human resource information systems nor are they included in payroll systems. Trying to gather accurate data for these worker types in a complex, global organization is a significant burden and difficult to execute.
Definition of compensation for purposes of the Pay Ratio Calculation:
To generate a meaningful and accurate result, companies are being asked to consider all compensation elements in the ratio calculation. The inclusion of compensation elements such as pension and other retirement income for large, global organizations requires that companies calculate change in pension value at an individual level. The work required to calculate change in pension value at an individual level for a large, global population is extremely labor intensive and costly.