Executive Pay Resurfaces The SEC Proposes New Pay For Performance Rules

    View Authors May 2015

    In its most recent action dealing with the controversial topic of executive pay, on Wednesday, April 29, 2015, the Securities and Exchange Commission (SEC) voted 3 - 2 to approve proposed rules regarding pay-for-performance in the wake of the Dodd-Frank Act. 1 The proposed rule is intended to require companies to show, typically in their annual proxy statement, the relationship between the amount of executive compensation actually paid and the company’s fiancial performance. This proposal is separate from the pay ratio disclosure rule proposed by the SEC in September 2013 that would require companies to disclose the pay gap between CEOs and ordinary employees,2 and we are not expecting that proposed rule to be readdressed by the SEC until at least the second half of 2015.