SEC Adopts Final Rules Requiring Pay Versus Performance Disclosure In 2023 Proxy Statements

The U.S. Securities and Exchange Commission (SEC) has adopted final rules that will require significant new disclosures in proxy and information statements about the relationship between executive compensation actually paid by a company and the company's financial performance. Companies with a December 31 fiscal year end will be required to include these new disclosures in their proxy statements for 2023 annual meetings unless the company is exempt from the requirements of the final rules. For most companies, the disclosure required by the final rules is likely to require significant efforts at various levels, including the company's senior executive officers and its compensation committee and full board of directors. Many companies are likely to find that the new pay versus performance disclosure requirements are based on compensation amounts and performance metrics that are different from those currently used by the company and may find it useful to enhance their