Less Is More? SEC Proposal Could Dramatically Reduce Required Proxy Disclosures

Seyfarth Synopsis:The SEC issued proposals that, if adopted, would allow many public companies to significantly reduce previously required executive compensation disclosures, eliminate certain shareholder votes, and avoid auditor attestation under Section 404(b) of the Sarbanes-Oxley Act. Companies should begin evaluating how the proposed framework could affect future proxy statements and reporting practices, while recognizing that reducing previously provided disclosure will require careful legal and business judgment.

On May 19, 2026, the Securities and Exchange Commission (the “SEC”) issued Release No. 33-11419 and Release No. 33-11418, proposing a major simplification of the public-company reporting framework. The proposal would consolidate the current overlapping categories of large accelerated filers (“LAFs”), accelerated filers, non-accelerated filers (“NAFs”), smaller reporting companies, and emerging growth companies into two primary categories: LAFs and NAFs.

Who Would Still Be a Large Accelerated Filer?

Under the proposal, a company generally would qualify as an LAF only if it:

• Maintained an average public float of at least $2 billion during the last 10 trading days of its second fiscal quarter for two consecutive fiscal years; and
• Had been subject to SEC reporting requirements for at least 60 consecutive months.

The proposal would revise the LAF eligibility criteria as follows:

What Would Change for Non-Accelerated Filers?

A company that does not satisfy the LAF requirements generally would qualify as an NAF. The SEC estimates that approximately 80.8% of reporting companies would fall into the NAF category under the proposed framework.

Under the proposal, eligible NAFs would be permitted to provide the following scaled executive compensation disclosures:

Fewer Compensation Tables and Other Reporting Relief

The proposal also would eliminate several executive compensation tables for eligible NAFs, including:

• Grants of Plan-Based Awards Table;
• Option Exercises and Stock Vested Table;
• Pension Benefits Table; and
• Nonqualified Deferred Compensation Table.

In addition, NAFs would be exempt from the auditor attestation requirement under Section 404(b) of the Sarbanes-Oxley Act and would benefit from other scaled financial and periodic-reporting requirements.

What Public Companies Should Consider Now

Although the proposal is not yet final, public companies may want to begin assessing its potential impact. Key considerations include:

• Determining whether the company would qualify as an LAF or NAF under the proposed two-year public-float and reporting-history standards;
• Identifying the executive compensation disclosures and shareholder votes that could become optional;
• Considering whether investors, proxy advisory firms or other stakeholders may continue to expect disclosures that would no longer be required;
• Evaluating whether existing disclosure controls and reporting calendars would need to change; and
• Coordinating among legal, finance, human resources, investor relations, and outside advisers before reducing historically provided disclosure.

Employer Takeaway:The proposal could substantially reduce proxy and reporting obligations for many public companies. But less disclosure is not automatically better disclosure. Companies that become eligible for scaled reporting should weigh potential cost savings against investor expectations, peer practices, and the value of consistency from year to year.

Looking Ahead

The comment period closed on July 20, 2026. The SEC may revise the proposal before adopting any final rules, and companies should continue monitoring the rulemaking. If the SEC adopts the framework substantially as proposed, the changes would represent a significant shift in public-company reporting and executive compensation disclosure.