SEC Releases Final Regulations For Pay Versus Performance

On August 25, 2022, the US Securities and Exchange Commission (SEC) issued final rules setting forth new pay for performance disclosure requirements originally required by the Dodd-Frank Act. The final rules are intended to show the relationship between compensation actually paid to a company's principal executive officer (PEO) and its other named executive officers (NEOs) and the financial performance of the company. This Advisory reviews the new rules and identifies several areas that SEC registrants should begin to focus on now in preparation for the 2023 proxy season.

Summary of New Disclosures

The disclosures, which are set forth in new Regulation S-K Item 402(v), will be required to be included in proxy statements or information statements in which executive compensation disclosures are required under Item 402.¹ In adopting the new requirements, the SEC noted that although the Compensation Discussion & Analysis already mandates an explanation of "all