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SEC Proposes Pay-Versus-Performance Disclosure Rule

Joe Mont | April 29, 2015

Checking another item off its Dodd-Frank to-do list, the Securities and Exchange Commission on Wednesday proposed new executive compensation disclosure requirements. The pay-versus-performance proposal, gestating for more than five years, calls upon all public companies to disclose the relationship between the compensation paid to named executive officers and its relationship to both the total shareholder return of the company and that of its peer group.

Notably, the proposal would require companies to provide information in XBRL (eXtensible Business Reporting Language), an interactive data format. “Requiring the disclosure in interactive data format could increase the comparability and usefulness of the disclosures,” SEC Chair Mary Jo White said prior to the 3-2 vote by the Commission (Commissioners Daniel Gallagher and Michael Piwowar voted in the negative). It is the first time...

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