The SEC Adopts Pay-Versus-Performance Disclosure Requirements for Executive Compensation—Do They Relate to You?

On August 25, 2022, the U.S. Securities and Exchange Commission (SEC) voted to adopt the “pay-versus-performance” rule, requiring publicly traded companies (except foreign private issuers, registered investment companies, and Emerging Growth Companies) to provide clear disclosure to shareholders on the relationship between companies’ executive compensation and financial performance. The adoption finally implements Section 14(i) of the Securities and Exchange Act of 1934 (the “Exchange Act”), as added by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.