SEC Adopts Pay Versus Performance Disclosure Requirements

The Securities and Exchange Commission (SEC) recently adopted new pay versus performance disclosure requirements, which will require companies to disclose information reflecting the relationship between executive compensation actually paid by a company and the company's financial performance. The new rules will require companies to provide a table and clear descriptions disclosing specified executive compensation and financial performance measures for their five most recently completed fiscal years, among other items.

Subject to certain exceptions, companies must begin to comply with the new disclosure requirements in proxy and information statements that are required to include executive compensation disclosure for fiscal years ending on or after December 16, 2022. Therefore, calendar year-end companies will need to include the new disclosures in the proxy statements filed during the 2023 proxy season. Smaller reporting companies (SRCs) will be subject to scaled