SEC Adopts Dodd-Frank Act Pay-Versus-Performance Rules

Key Takeaways

• On August 25, 2022, the Securities and Exchange Commission ("SEC") adopted final pay-versus-performance rules (the "Final Rules") that guide the implementation of Section 953(a) of the Dodd-Frank Act, requiring registrants to disclose, in both tabular and narrative format, how their executive compensation is paid in relation to their financial performance.
• The Final Rules largely adopt the earlier rules proposed by the SEC.
• Registrants must begin to comply with the new disclosure requirements in Annual Reports, Proxy Statements and Information Statements that are required to include Item 402 executive compensation disclosure for fiscal years ending on or after December 16, 2022.