SEC Sets Effective Date for New Disclosure Rules on Executive Pay

An SEC final rule amending the disclosure rules on executive compensation under Regulation S-K will become effective on October 11, 2022. The Notice was published in the Federal Register.

As previously covered, the final rule will require most reporting companies to provide specific disclosure concerning the relationship between executive compensation "actually paid" to their named executive officers and the companies' financial performance. It will require the compensation information to be compiled into a new table and tagged with interactive data, including (i) compensation "actually paid" to the company's principal executive officer and, as an average, the compensation "actually paid" to the company's other named executive officers; (ii) the total shareholder return for the company and the company's peer group; (iii) the company's net income; and (iv) a company-selected financial performance measure.

The final rule will apply to all reporting companies, except foreign private issuers, registered investment companies and "Emerging Growth Companies" and will be scaled depending on the size of the company. Disclosures will be required for proxy and information statements for fiscal years ending after December 16, 2022.