These SEC disclosure requirements are intended to ensure investors and other parties receive clear, comprehensive, and transparent disclosures regarding executive and director compensation and related matters. The new rules do not regulate how much an executive officer should be paid; rather they are meant to ensure that companies disclose relevant information so that investors and other parties can readily determine the total amount of compensation that is actually awarded to executive officers.
This publication highlights the significant aspects of the rules and their impact on registrants. The key components of the rules include:
- A definition of the term "named executive officer" and a different method of determining which officers are the three most highly compensated
- A compensation discussion and analysis (CD&A) section
- A summary compensation table, accompanied by six new supplemental tables/li>
- Modified and consolidated Form 8-K disclosure requirements
- Enhanced related-person disclosures, including disclosure of the policies for the review, approval, or ratification of transactions with related persons
- The executive compensation disclosures (including the CD&A section) and related-person disclosures are considered "filed" with the Commission and as such are covered by the certifications required under the Sarbanes-Oxley Act of 2002
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SEC final rule: Executive compensation and related person disclosure (191kb)
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