The Securities and Exchange Commission Wednesday proposed rules to require companies to disclose the relationship between executive compensation and the financial performance of a company.
The proposed rules, which implement a requirement mandated by the Dodd-Frank Act, will be out for a 60-day comment period.
“These proposed rules would better inform shareholders and give them a new metric for assessing a company’s executive compensation relative to its financial performance,” said SEC Chair Mary Jo White, in remarks at the SEC’s open meeting. “The proposal would require enhanced disclosure that can be compared across companies.”
As the SEC explains, the proposed rules would require a company “to disclose executive pay and performance information for itself and companies in a peer group in a table and to tag the information in an interactive data format.”