SEC Reopens Comment Period On Executive Compensation Proposal

The SEC reopened the comment period on a proposal to amend the current executive compensation disclosure rule, Item 402 of Regulation S-K, to require that companies disclose the relationship between their executive compensation and financial performance.

The proposal was originally published in April of 2015 (see prior coverage). The proposed revisions to Item 402 implement Exchange Act Section 14(i) ("Proxies - disclosure of pay versus performance"), which was created by Dodd-Frank Section 953.

Commissioner Statements

SEC Chair Gary Gensler expressed support for the proposed rulemaking, saying it would "strengthen the transparency and quality of executive compensation disclosure." Mr. Gensler also noted that, if adopted, the proposal would "fulfill a mandate from Congress under the Dodd-Frank Act of 2010."