Take Two: SEC Reopens Proposed Rule On Executive Compensation Disclosures

Yesterday, the SEC reopened for comment a Dodd Frank-era proposed rule that would allow investors to more easily compare the compensation of public company executives to shareholder returns.

The SEC originally opened the proposed rule – dubbed the "pay versus performance" rule – in 2015.  It would require public companies to disclose to shareholders charts that compare the compensation of their principal executive officer and the average compensation of other officers with shareholder returns.  In the SEC statement that accompanied the proposed rule, SEC Chair Gary Gensler stated:

"This proposed rule would strengthen the transparency and quality of executive compensation disclosure. . . . The commission has long recognized the value of information on executive compensation to investors."