SEC Proposes New Pay For Performance Rules

 On Wednesday, the Securities and Exchange Commission (the “SEC”) proposed new rules requiring public companies to disclose the relationship between executive compensation and company financial performance.¹ These rules are long awaited as they were mandated in 2010 under Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed rules generally would apply to all issuers, including smaller reporting companies, but exclude foreign private issuers and emerging growth companies. The comment period for these proposed rules will expire 60 days after publication in the Federal Register. Although it is not clear when final rules will be adopted, companies should be prepared to implement pay for performance disclosures as soon as next proxy season.