The U.S. Securities and Exchange Commission (SEC) issued a press release on Friday, May 16, 2025, announcing plans to host a June 26 roundtable focused on executive compensation disclosure requirements.
In a letter from SEC Chair Paul S. Atkins, the case for a review is set out, citing concerns about the length, complexity and cost implications of the current standard. Atkins wrote:
“While it is undisputed that these requirements, and the resulting disclosure, have become increasingly complex and lengthy, it is less clear if the increased complexity and length have provided investors with additional information that is material to their investment and voting decisions.”
The review and roundtable invites perspectives from multiple stakeholder groups, including issuers, investors and other experts in the field of executive pay.
The letter spotlights these categories of questions for consideration:
The nine questions set out by Atkins reflect the SEC’s desire to make sure it understands the process all stakeholders undertake in the pay setting and voting process and whether commenters believe changes in disclosure are warranted. A summary of the questions:
The fact that the SEC is hosting this roundtable coupled with the nature of the questions suggests that streamlining and simplifying disclosures is a fundamental goal. The SEC is serious about public comments regarding how the current process works for issuers, investors, proxy advisors and the general public, and is required to provide detailed economic analyses about its decisions.
Interestingly, the SEC tends to stay out of the question of how the disclosure regime influences the design and magnitude of executive pay, focusing instead on the core question of whether disclosure provides material information balanced against its cost.
Changes in these rules will require a rulemaking process, which means proposed rules would be issued, followed by a public comment period, before they are finalized. In this circumstance, we see the initial public comment period as being paramount for those who want to have their views heard and understood.
Given the pace at which executive pay disclosure has expanded in recent years, this could represent a welcome change for both issuers, who invest significant time and cost in compliance, and investors who must trawl through often dense paragraphs to find what matters most. A key challenge in a simplified disclosure environment may well be ensuring sufficient information is provided to secure favorable voting recommendations from influential proxy advisors.
Responses can be provided online or in writing.
