Last month, the SEC issued an interpretive release addressing
Item 303 of Reg S-K (see Rel. No. 33-10751, Key Performance Metrics
(2020)). Although this guidance relates to the MD&A,
it is, of course, also relevant to executive compensation and
disclosure professionals, because key performance metrics are
usually an important part of short- and long-term incentive
compensation plans and disclosures. The release is relatively
benign but worth reviewing for its increased scrutiny on
performance metrics. The following is from the latest issue of
The Corporate Counsel (subscription required):
This interpretive release joins a long line of MD&A
interpretive releases, reflecting an ongoing theme that the
Commission and the Staff are never quite satisfied with the quality
of issuers’ attempts at drafting MD&A. In the
interpretive release, the Commission provides guidance on
disclosure of key performance indicators and metrics in MD&A.
The Commission notes that disclosure
