By Heather Marshall , Steve Seelig and Max Fogle | July 2, 2025
In their opening remarks of the recent U.S. Securities and Exchange Commission’s (SEC’s) executive compensation roundtable, Republican majority Chair Paul Atkins and Commissioners Hester Peirce and Mark Uyeda highlighted disconnects between the original intent of disclosure rules and the realities observed today. These comments set the tone for the discussion that followed.
A consistently cited point of tension was how to balance disclosure of material information for investors with the burden placed on public corporations to satisfy detailed requirements. The notion of materiality itself also was a central question, with Commissioner Peirce noting that aspects of current disclosure requirements seem focused on public interest rather than investors.
CEO pay ratio, pay vs. performance and clawback requirements — all stemming from the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act — drew early attention. This is a strong indication that the SEC is considering alternatives to how these statutory Dodd-Frank requirements have been implemented.
Other topics identified at the outset included the (lack of) clarity and length of compensation disclosures as well as the difficulty of identifying and quantifying executive perquisites.
Generally, corporate issuers and advisors tended to favor a scaled back version of the current principles-based approach to the Compensation Discussion and Analysis (CD&A). Meanwhile, investor representatives tended to favor more clarity in standardized disclosures while hoping for a more targeted, rules-based CD&A. These positions are not surprising.
Select issues raised during the roundtable — in no particular order — included:
Pay vs. performance (PVP): Companies and advisors highlighted the material costs involved in preparing the PVP analyses, adding that the analyses often were confusing and risked being misleading given the term “compensation actually paid.”
It was noted that questions from investors are not received about PVP and, internally, most companies often use their own approach to analyzing in-cycle and compensation paid analyses to inform decisions rather than “compensation actually paid.” Investors also suggested they focus on their own versions of “actual” pay, but noted how hard it can be to piece together what executives earn from their equity-based pay.
Perquisites/all other compensation: Companies highlighted that including perquisites in the Summary Compensation Table (SCT) total compensation calculation can be highly distracting as well as expensive and challenging to prepare.
One particular concern was that executive security is widely accepted as a cost of doing business even though perquisite rules require their disclosure. It was noted that companies often are punished by proxy advisors for excessive pay when these costs are included in the SCT. Investors noted that disclosure ensures appropriate oversight of policies and practices, and high values/inappropriate elements can be an indicator of poor governance.
Companies and advisors noted that, on rare occasions, pay decisions were influenced by whether increases would bring an executive onto the proxy (given that NEO determination is based on rank order of total compensation).
It is hard to see how the SEC will be able to satisfy all stakeholders. As one panelist noted, there is a risk that scaled-back disclosure requirements could lead to lower say-on-pay outcomes.
Despite differences among stakeholders, there was consensus across several issues:
Despite typically being the largest element of an executive’s pay, consensus seemed to emerge that equity often is the hardest to understand. This difficulty stems from how awards are reported across various tables as well as the challenges of tracking an award through its lifecycle, from grant to liquid asset.
The technical panel discussions focused almost exclusively on:
Suggestions focused on exploring opportunities to better group information on target and actual pay as well as streamlining the number of tables.
Past SEC actions have been deliberate, allowing plenty of time for comments and often assigning distant effective dates. Yet, some speakers suggested that delays between analyses of proposed changes and eventual rule approval meant decisions were rushed. Speakers also noted that the economic analyses underestimated the costs of compliance.
This sentiment suggests that things will move forward more quickly for the SEC. In fact, Chair Atkins asked that comments be sent to the SEC within the next few weeks. This also suggests that the SEC will undertake a deliberate review of the comments and, perhaps, proposed regulations later this year.
This would mean that final regulations would not be issued until 2026, although the SEC has the discretion about when proxies would then comply with the new disclosure regime. This process would be the same for any change in the regulations that implement the CEO pay ratio, PVP and clawbacks. In contrast, executive perquisite disclosure could be an area that the SEC tackles on an accelerated basis given that it sits outside of statutory mandates.
The SEC continues to accept responses, which can be submitted online or in writing as part of the review initiation.
