Companies and individuals need to stay attentive to the bouncing ball that is the Securities and Exchange Commission.

The commission has finally enacted a ridiculous regulation that the SEC itself never wanted, and suffered a substantial defeat before the U.S. Supreme Court.

Pay Ratios Rule

In the 2010 Dodd-Frank Act, Congress charged the SEC with adopting regulations requiring comparison of a public CEO’s earnings to the median earnings of all other employees. The SEC delayed and delayed. Criticism from the business community, and from Republicans on the commission itself, did nothing to speed the process.

It took the SEC until 2014 to propose the rule, with the proposing release itself raising all sorts of questions. The SEC finally promulgated its binding “rule” effective this fall.

To read the full text of this article by Duane Morris partner Stephen M. Honig, please visit the New England In-House website.