On August 25, 2022, the SEC adopted new pay-for-performance rules requiring public companies to disclose executive pay compared to company performance.

  • While the basic idea behind these rules may seem straightforward, the new rules have the potential to pose a host of new challenges for public companies.
  • Notably, the new rules have the potential to change how a company is seen by altering how its compensation is measured in ways that are not easy to predict.
  • Companies will need to comply with the new rules in the upcoming proxy season and should begin reviewing the new requirements and analyzing how their executive compensation will be viewed under the new rules as soon as possible.

In this client alert, Bonnie J Roe breaks down the SEC’s new disclosure rules, analyzes their potential impact on public companies, and offers insight into how companies can mitigate any potential risks posed by the “pay-for-performance” rules.