Public companies in the United States would be required to disclose how the pay of their top executives squares with their overall performance under a U.S. Securities and Exchange Commission (SEC) rule proposed on Thursday.
The pay-versus-performance measure, which builds on a 2015 SEC proposal mandated by the 2010 Dodd-Frank financial reform law, calls for companies to disclose performance measures beyond total shareholder return and to list the five most important performance measures used to determine compensation actually paid to executives.
Wednesday's rule, which must first receive public consultation before it can take effect, also asks whether companies should spell out whether pre-tax net income and net income would be useful additional financial metrics.
© 2024 Thomson/Reuters. All rights reserved.