Money Talk: SEC Adopts Rule For Pay Ratio Of CEO vs. Average Employee

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SEC ADOPTS RULE FOR PAY RATIO OF CEO VS. AVERAGE EMPLOYEE
The Securities and Exchange Commission has adopted a final rule that requires a public company to disclose the ratio of the compensation of its chief executive officer to the median compensation of its employees. The new rule, mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, provides companies with flexibility in calculating this pay ratio, and helps inform shareholders when voting on “say on pay.”

The new rule will provide shareholders with information they can use to evaluate a CEO’s compensation and will require disclosure of the pay ratio in registration statements, proxy and information statements, and annual reports that call for executive compensation disclosure. Companies will be required to provide disclosure of their pay ratios for their first fiscal year beginning on or after Jan. 1, 2017.

The rule does not apply to smaller reporting companies, emerging growth companies, foreign private issuers, multi-jurisdictional disclosure system filers, or registered investment companies. The rule does provide transition periods for new companies, companies engaging in business combinations or acquisitions, and companies that cease to be smaller reporting companies or emerging growth companies. For a fact sheet on new rules, click here.

ST. LOUIS FED PRESIDENT DISCUSSES ‘ZERO’ INTEREST RATE POLICY
In a new white paper debating the Federal Reserve’s monetary policy, St. Louis Fed President James Bullard and a few colleagues discuss “What should monetary policymakers do when the policy rate is effectively at zero?”

Bullard says: “Conventional theory suggests that forward guidance should lead to good outcomes for the economy, such as higher current consumption, and eventually to higher inflation.

“Unfortunately, despite keeping nominal policy rates near zero for several years in the U.S. and the eurozone and for even longer in Japan, the expected consumption boom and increase in inflation have arguably not materialized. Whether these effects will happen in the future remains an open question, but because the core prediction has not yet come to pass, some researchers are rethinking monetary policy at the zero lower bound.”

Bullard participates in the quarterly Federal Open Market Committee (FOMC) meetings directed by Fed Chairwoman Janet Yellen, and oversees activities of the bank’s head office in St. Louis and branches in Little Rock, Louisville, Ky., and Memphis, Tenn. To read his full report, click here.

U.S. CENSUS BUREAU PUBLISHES 2014 ANNUAL SURVEY OF PUBLIC PENSIONS
Government contributions to public pension funds increased 11.1%, from $108.9 billion in 2013 to $121.1 billion in 2014, driving total contributions up 8.45% from $153.7 billion in 2013 to $166.6 billion in 2014, according to a new U.S. Census Bureau report.

Earnings on investments for state- and locally-administered pension systems increased 40.6%, from $382.2 billion in 2013 to $537.5 billion in 2014, the report shows. Data for the survey was collected from 230 state-administered and 3,742 locally-administered defined benefit public pension systems. More statistics are available here.

BANK FRAUD LOSSES PILE UP IN U.S., GLOBALLY
Fraud losses incurred by banks and merchants on all credit, debit, and prepaid general purpose and private label payment cards issued worldwide reached $16.31 billion last year when global card volume totaled $28.844 trillion.

This means that for every $100 in volume, $5.65 was fraudulent. Fraud, which grew by 19%, outpaced volume, which grew by 15%. Fraud losses occurred from counterfeiting, card not present (CNP), fraudulent application, lost & stolen, card not received, and other much smaller categories, according to The Nilson Report, the top trade newsletter covering the card and mobile payment industries.

When measuring only the global general purpose brands — UnionPay, Visa, MasterCard, JCB, Discover/Diners, and American Express, total volume was $23.777 trillion, up 14.8%, and fraud losses were $15.45 billion, up 18.5%. The U.S. accounted for 48.2% or $7.86 billion of gross card fraud losses worldwide, while generating only 21.4% or $6.187 trillion of total volume. U.S. fraud losses equaled $12.75 for every $100 in total volume last year.

The full article “Global Fraud Losses Reach $16.31 Billion” is available by downloading the current issue at www.nilsonreport.com.

BANKS OF THE OZARKS COMPLETES ANOTHER DEAL, MOVES CLOSER TO $10 BILLION IN ASSETS
Bank of the Ozarks, Inc. closed on its acquisition of Bank of the Carolinas Corp. last week, moving the Little Rock bank closer to the $10 billion in assets threshold that triggers additional opportunities and regulatory requirements as a regional bank.

Bank of the Ozarks first announced on May 6 that it would acquire Bank of the Carolinas Corp. for $64.7 million in an all-stock transaction. As of June 30, 2015, the North Carolina banking group has assets of approximately $345 million of total assets, $277 million of loans, $296 million of deposits and $48 million in common stockholders’ equity.

Bank of Ozarks’ holding company had total assets of $8.71 billion at the end of the second quarter and currently owns a state-chartered namesake subsidiary bank that conducts operations through 172 offices in Arkansas, Georgia, North Carolina, Texas, Florida, Alabama, South Carolina, New York and California.