#Get proxie update#
SRCs will not have to comply with the XBRL requirement until the third annual filing containing pay versus performance disclosure.įor additional information regarding pay versus performance, see our Legal Update “SEC Adopts Pay Versus Performance Disclosure Rule,” dated August 31, 2022. The footnotes and description of the relationship may be tagged using block-text tags, while individual data points must be separately tagged.
The pay versus performance table, footnotes and related disclosures all must be separately tagged using Inline XBRL. SRCs would only need to provide information for two years for the first filing required for years ending on or after December 16, 2022, with a third year added in their next annual proxy or information statement that requires executive compensation disclosure. In each of the two subsequent years, another year of disclosure would be added. The general phase-in for the rule will require pay versus performance disclosure for three years in the first proxy or information statement in which such disclosure is required for all companies, other than SRCs, for fiscal years ending on or after December 16, 2022. Newly reporting companies do not need to include pay versus performance information for fiscal years prior to their first completed fiscal year as a reporting company. The new table will eventually contain data for five years, except that smaller reporting companies (SRCs) are permitted to provide three years of data. Company-selected financial performance measure (Company-Selected Measure).Company total shareholder return (TSR),.The performance measures required to be included are: The pay versus performance table must disclose the compensation paid to the PEO and the average compensation paid to the Remaining NEOs as compared to four performance measures. Tabular list of the most important financial performance measures that the company uses to link named executive officer compensation to company performance.Clear description of the relationship between the compensation actually paid to the principal executive officer (PEO) and to the other named executive officers (Remaining NEOs) and the company’s performance across each of the measures included in the pay versus performance table, which may be presented as a narrative, a graph or a combination of the two, and.Thus, the new rule will generally apply for the upcoming 2023 proxy season.Īs adopted, new Item 402(v) of Regulation S-K requires: The new pay versus performance disclosures must be included in proxy and information statements that are required to include such compensation information for fiscal years ending on or after December 16, 2022. As adopted, the rule generally requires disclosure of five years of pay versus performance data in proxy and information statements in which executive compensation information is required to be included pursuant to Item 402 of SEC Regulation S-K. In August 2022, the SEC finally adopted a “pay versus performance” rule in accordance with a Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) mandate that requires SEC-reporting companies to disclose in a clear manner the relationship between executive compensation actually paid Septemand the financial performance of the company. While these discussions reference the dates targeted in the SEC Regulatory Agenda for final or proposed rules, he actual dates for SEC action could be earlier or later. Rulemaking, based on the US Securities and Exchange Commission’s (SEC) spring 2022 regulatory agenda (SEC Regulatory Agenda), that potentially could impact the 2023 or subsequent proxy seasons. This post describes pending and announced US Securities and Exchange Commission (SEC) Post provides an overview of key issues that companies should consider as they get readyįor the upcoming 2023 proxy and annual reporting season. However, in light of the amount of work and planning that goes into the proxy statement,Īnnual report, and annual meeting of shareholders, this is the ideal time to begin preparations. With the calendar just turning to autumn, the proxy and annual reporting season may seem a long
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