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Statement at Open Meeting Regarding the Proposing Release on Pay Ratio Disclosures

Commissioner Kara M. Stein

Sept. 18, 2013

I want to reiterate the thanks to staff in the Division of Corporation Finance, the Division of Economic and Risk Analysis, and General Counsel for their hard work on this proposal. 

Today, the Commission considers proposing rules to implement disclosure of an estimated pay ratio under Section 953(b) of the Wall Street Reform and Consumer Protection Act of 2010.  Prior to this proposal, the Commission smartly sought public comment concerning approaches and possible implementation issues and the proposal reflects that. 

Pay ratio disclosure may appear, on its face, to be a simple matter of basic arithmetic.  It, of course, has proven to be anything but simple.  The staff has been hard at work evaluating comment letters and formulating a rule that preserves the benefits intended by the statutory provision that requires the disclosure while, at the same time, reducing the costs and complexity for issuers.  The staff has attempted to craft a flexible approach that seeks to obtain the intended benefits without unduly burdening issuers. 

But whether we have gotten that balance right remains to be seen.  I think the questions in the proposing release seek additional data, alternative approaches, and viewpoints.  It is critical that we have thoughtful and informative responses from investors, issuers, and other stakeholders in order to properly evaluate and finalize the rules.   I encourage everyone to robustly comment on this proposal.  

I also want to reiterate what Commissioner Aguilar said about the enhanced compensation disclosures that Congress and the President asked us to complete as part of the Wall Street Reform and Consumer Protection Act.

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