SEC Adopts New Rules On Executive Compensation

On August 25, 2022, the Securities and Exchange Commission ("SEC") announced the adoption of amendments to rules relating to executive compensation disclosure. The final rule can be found here. As mandated by Section 953(a) of the Dodd-Frank Act, Item 402 of Regulation S-K was amended to add subsection (v), which requires companies to disclose information depicting the relationship between executive compensation actually paid and the company's financial performance in annual proxy statements. In announcing the final rule, the SEC noted that it provides for more flexible disclosures that allow companies to describe the performance measures it deems most important when determining what is paid to executives. The aim is to ensure investors have access to "consistent, comparable, and decision-useful information" needed to evaluate a company's executive compensation policies.