Articles

A Practitioner’s Guide to the CEO Pay Ratio Calculation

There’s an elephant in the room: CEO pay ratio. Absent any immediate changes from regulators, companies will have to disclose this figure in their 2018 proxies. We’ve talked to companies whose preparation ranges from not having started the calculation to those who have reliable estimates of figures ready to be updated on a moment’s notice.

We’ve also heard concerns about the compliance costs of this disclosure. While its usefulness to investors is open to debate, we have found that CEO pay ratio can be disclosed both accurately and cost effectively by using a thoughtful plan and methodology.

In this issue brief, we share some lessons learned along the way, go over best practices, and outline the steps your company will need to take to get to a pay ratio figure.