SEC proposes overhaul of executive compensation disclosures

The SEC on Friday proposed significant amendments to its executive compensation disclosure requirements.

“These amendments reflect a comprehensive reform of [Regulation S-K] Item 402 that, together with other previously proposed actions, are central tenets of my agenda and focus on transforming the SEC’s public company disclosure regime to one rooted in materiality,” SEC chair Paul Atkins said in a news release. “With the benefit of input from more than 80 comment letters received from investors, companies, and advisers in connection with the SEC’s roundtable on executive compensation in July 2025, today’s proposal aims to elicit more informative disclosure rooted in materiality.”

According to the release, the proposal would refocus executive compensation disclosures, last comprehensively reformed in 2006, on material information while improving investors’ ability to track equity awards through their life cycle. The proposed amendments aim to reduce compliance burdens for registrants where there is not commensurate benefit for investors and would provide registrants with more flexibility to present their disclosures in a way that is consistent with how compensation programs are constructed today.

The proposed amendments to Item 402 of Regulation S-K include:

• Revising the named executive officers to encompass the principal executive officer and principal financial officer, reducing in most cases the number of named executives from five or more to two.
• Modifying the primary executive compensation tabular disclosure requirements from its current four tables into three (earned compensation, granted compensation, and status of equity awards).
• Raising the minimum aggregate reporting threshold for perquisites from $10,000 to $150,000 and introducing a new de minimis tracking exclusion.
• Simplifying pay-versus-performance disclosures and revising requirements related to employee pay-ratio reporting.

Public comments will be accepted for 60 days following publication of the proposal in the Federal Register.

In other SEC news: The SEC recently gave its official stamp of approval to the PCAOB’s amendments to QC 1000, A Firm’s System of Quality Control, which will be effective Dec. 15. … The SEC recently adopted amendments to the rules that define which registered investment companies, investment advisers, and business development companies qualify as small entities for purposes of the Regulatory Flexibility Act. … There’s still time to register for the AICPA Conference on Current SEC and PCAOB Developments, scheduled for Dec. 7–9 in Washington, DC, and online.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.