By Deb Lifshey, managing director and Sharon Podstupka, principal, Pearl Meyer

Perhaps one of the most controversial provisions under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is the requirement to track and disclose the ratio between a company’s median paid employee and its CEO (often called the CEO Pay Ratio). The U.S. Treasury secretary and top financial regulators will convene and deliver a report by June outlining what they believe is, and what isn’t, working under this rule. In addition, the acting chairman of the Securities and Exchange Commission (SEC) sought additional public comments specific to the CEO Pay Ratio, which were submitted at the end of March.

While it is possible the CEO Pay Ratio rule will either be amended or delayed, companies should still be spending some time preparing for the rule because any significant changes will require Congressional action, which typically takes time. At the time of this writing, companies should be operating under the assumption that the requirement will go into effect for proxies filed in 2018. Whether your company has hundreds of thousands of employees spread throughout the world or is a smaller domestic business, we recommend a structured approach to ensure organized collection of data and clear presentation of the ratio.