Final Pay-versus-Performance Disclosure Rules: Compliance Q&As

Key takeaways:

On August 25, 2022, the U.S. Securities and Exchange Commission ("SEC") adopted final rules implementing the "pay versus performance" provisions of the Dodd-Frank Act. New Item 402(v) requires the disclosure of information that shows the relationship between executive compensation actually paid and the financial performance of the issuer, which includes:

• a new pay-versus-performance table, containing: (1) the summary compensation table total and the total "executive compensation actually paid" for the CEO and for the other named executive officers as an average; (2) total shareholder return ("TSR") for both the registrant and its peer group; (3) net income; and (4) a "company-selected measure," reported for up to five years (starting with three years for the first filing). The calculation of "executive compensation actually paid" includes adjustments from the summary compensation table totals for both pension benefits and equity awards;