The SEC’s final pay versus performance disclosure rules, published in August 2022, contain expansive updates to the way most public companies report their executive compensation. (To help further clarify the rules, the SEC released 15 Compliance and Disclosure Interpretations on February 10, 2023. The latest guidance can be found in Regulation S-K C&DIs under Sections 128D and 228D.)
The following FAQs outline what you need to know about the pay versus performance rules and what actions your organization can take now to comply with the disclosure requirements.
What Are the Pay Versus Performance Disclosure Rules?
Meant to enable greater insight into executive compensation, the pay versus performance rules require organizations to disclose the relationship between executive compensation awards and their company’s financial performance. This information must be disclosed in the company’s annual proxy forms and is effective for the 2023 proxy season.