The SEC issued its final rule that amends Regulation S-K to require listed companies to disclose the relationship between executive compensation and certain measures of financial performance of the registrant for the five most recent fiscal years (phased in over the first three years and scaled for SRCs).
Update: On November 21, 2023, the SEC staff released additional and revised certain Compliance & Disclosure Interpretations (C&DIs) covering implementation and practical questions related to the new pay versus performance disclosure requirements – including topics related to equity awards and vesting conditions, determination of the peer group and named executive officers, and changes in issuer status.
The final rule requires executive compensation information to be presented alongside four specific financial performance measures (FPMs) in a tabular format (called the ‘PvP table’) for each of the five most recent years.
In addition to the PvP table, the rule requires disclosure of the relationship between executive compensation actually paid and the FPMs, and a tabular list of the three to seven most important FPMs used by a registrant to link executive compensation actually paid to company performance for the most recently completed fiscal year.
The PvP table
Other disclosures
C&DIs
The C&DIs issued by the SEC staff cover matters of general applicability (C&DI 128D.01) and various specific implementation topics, including:
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