1) News release -- The Securities and Exchange Commission today adopted amendments to its rules to require registrants to disclose information reflecting the relationship between executive compensation actually paid by a registrant and the registrant’s financial performance. The rules implement a requirement mandated by the Dodd-Frank Act. The Commission proposed pay versus performance disclosure rules in 2015 and reopened the comment period on the proposal in January of this year. . . .
Specifically, the amendments require registrants to provide a table disclosing specified executive compensation and financial performance measures for their five most recently completed fiscal years. With respect to the measures of performance, a registrant will be required to report its total shareholder return (TSR), the TSR of companies in the registrant's peer group, its net income, and a financial performance measure chosen by the registrant. Using the information presented in the table, registrants will be required to describe the relationships between the executive compensation actually paid and each of the performance measures, as well as the relationship between the registrant’s TSR and the TSR of its selected peer group. A registrant will also be required to provide a list of three to seven financial performance measures that it determines are its most important performance measures for linking executive compensation actually paid to company performance. Smaller reporting companies will be subject to scaled disclosure requirements under the rules.
The adopting release will be published on SEC.gov and in the Federal Register. The final rules will become effective 30 days following publication of the release in the Federal Register. Registrants must begin to comply with the new disclosure requirements in proxy and information statements that are required to include Item 402 executive compensation disclosure for fiscal years ending on or after December 16, 2022.
2) Fact sheet -- The Securities and Exchange Commission adopted final rules implementing the pay versus performance requirement as required by Congress in the Dodd-Frank Act. The rules will require registrants to disclose, in proxy or information statements in which executive compensation disclosure is required, how executive compensation actually paid by the registrants related to the financial performance of the registrants over the time horizon of the disclosure.
3) Final rule -- https://www.federalregister.gov/d/2022-18771
4) Media summaries
WSJ, SEC Requires Disclosures on Executive Pay Versus Company Performance: Companies must provide a new table linking actual executive pay to shareholder return under new rule https://www.wsj.com/articles/sec-requires-disclosures-on-executive-pay-versus-company-performance-11661466954?st=9m80kb1ywubpgfe&reflink=desktopwebshare_permalink
Bloomberg, Top Executives Face More Scrutiny Over Pay in New SEC Rule: ‘Pay-versus-performance’ regulation was required by 2010 law https://www.bloomberg.com/news/articles/2022-08-25/top-executives-face-more-scrutiny-over-pay-in-new-sec-rule
HR Dive, SEC adopts pay-versus-performance disclosure rules https://www.hrdive.com/news/sec-adopts-pay-versus-performance-disclosure-rules/630650/