The United States' Securities and Exchange Commission narrowly voted Wednesday to adopt the controversial pay ratio rule. By a 3-2 margin along party lines, the members approved the rule, which forces public companies to publish their chief executive officers' total annual compensation as a ratio to their employees' median total compensation, MarketWatch reported.
Wednesday's decision was a long time coming. Congress passed the rule as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, and the SEC proposed it in 2013, NPR reported. It has proven to be divisive, with Republicans and trade groups arguing it would be unnecessarily costly and burdensome.
The rule was due to take effect for companies' first fiscal year starting on or after Jan. 1, 2017.