The Securities and Exchange Commission is reopening the comment period for the pay versus performance proposing release. The 2015 proposed rules would implement Section 14(i) of the Securities Exchange Act, as added by Section 953(a) of the Dodd-Frank Act. The Commission is seeking comment on all aspects of the 2015 proposing release as well as on additional questions posed in the reopening release.

A great number of comment letters were submitted concerning the 2015 proposing release. Considering the regulatory and market developments since then, the SEC is, once again, opening the comment period for public feedback on both the 2015 proposal and the following additional requirements the SEC is considering in the reopening release:

• Whether registrants should be required to disclose additional performance measures beyond total shareholder return;
• Whether, if required, pre-tax net income and net income would be useful additional financial measures;
• Whether registrants should be required to disclose the measure that, in the registrant’s assessment, represents the most important performance measure used by the registrant to link compensation actually paid during the fiscal year to company performance (which is called the “Company-Selected Measure”); and
• Whether registrants should also be required to disclose a tabular list of a registrant’s five most important performance measures used to determine compensation actually paid.

Interested parties may submit feedback on or before March 4, 2022. For information on how to submit comments, see the Proposed Rule on sec.gov.

Further details on the proposed rules and amendments is available on the SEC’s Pay Versus Performance: Comment Period Reopening fact sheet on sec.gov. For more information about the proposed rules, contact John Byrne, Special Counsel, Office of Small Business Policy, at (202) 551-3460, Division of Corporation Finance, Securities and 3 Exchange Commission, 100 F Street NE, Washington, DC 20549.

Sources:

SEC Reopens Comment Period for Pay Versus Performance (sec.gov)
What Pay Versus Performance Reporting Would Entail (novaworkssoftware.com, 2015)
SEC Proposed Rule 24-74835 (sec.gov)