Pay For Performance Table And Best Proxy Disclosure

The SEC recently released its proposed "pay for performance" rules under one of the last remaining executive compensation requirements mandated by the Dodd-Frank Act. This new "pay for performance" rule requires companies¹ to disclose the relationship between the actual compensation paid to their named executive officers and the company's financial performance as measured by total shareholder return (TSR).

While ​numerous other writings have focused on the technical requirements of the proposed rules, this alert focuses on the new "pay for performance" table which would be required to be included in a company's proxy statement and best practices to address the additional requirement of a description of (i) the relationship between executive compensation actually paid versus the company's TSR and (ii) the relationship between the company's TSR versus the TSR of its peer group.