Kathy Jaffari and Paul Hallgren examine the inaugural year of the SEC implementing pay versus performance disclosures in The Legal Intelligencer. In the article, they also provide insight into the history of compensation disclosure regulations, including Compensation Discussion and Analysis (CD&A), Say-on-Pay rules, and Pay Ratio requirements.
In August 2022, the SEC introduced amendments requiring public companies to disclose executive compensation "actually paid" in relation to their financial performance, as known as the pay versus performance disclosures. Kathy and Paul analyze the challenges faced by companies in their first year of this implementation, such as assembling interdisciplinary teams and valuation complexities.
They anticipate that with experience and guidance from the SEC and stakeholders, these disclosures will become more consistent and integral to executive compensation evaluations.
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