After much debate and with some fanfare, the SEC adopted new rules requiring companies to disclose the ratio of CEO pay to that of the median employee. Dodd-Frank (remember that?) mandated it, in 2010. It took five years to get here.

Great! Proponents hope it will shame BoDs and executives into lower pay levels. We hope it does. Few directors and CEOs have sufficient shame about anything, much less something as important as exec comp, to care.

Few intelligent investors care about this, either. SEC Commission Gallagher observed the rule won't "inform a reasonable investor's voting or investment decision", and while we mostly disagree with him, this time we concur. Earlier we reviewed the draft regulations with little enthusiasm, and urged shareholders to focus on more important subjects.

To its credit, the SEC makes it difficult for companies to play games with the figures. Companies use the same exec comp definitions found in the proxy statements, and have only a little latitude in defining the median employee pay.

On the other hand, the rules apply to relatively few companies. Smaller reporting (under $75 million market cap) and emerging growth companies (new ones under $1 billion in revenue, from the JOBS Act) need not comply.

And, the rules kick in starting January 1, 2017. We will see pay ratio figures beginning in Spring 2018, close to three years from now. Anything can happen by then, including challenges before a friendly judge. That didn't work out well for mandatory proxy access.

MRL