The SEC proposed a new rule that would require public companies to disclose the ratio of the compensation of its principal executive officer to the median compensation of all employees. The rule is meant to provide transparency on pay disparity and rein in bloated executive pay. It allows companies flexibility in calculating median pay and identifying employees. Companies can use statistical sampling or other reasonable methods. They can make reasonable estimates and do not need to include contractors. The ratio must be expressed as a ratio or narrative multiple. Companies must disclose their methodology and assumptions. The rule applies to companies already providing executive pay disclosure but provides exemptions for smaller companies.