The past year has seen its fair share of U.S. Securities and Exchange Commission rulemaking initiatives, in particular with respect to rules relating to compensation matters. During 2015, the SEC issued rules on three significant and highly anticipated compensation-related matters. The rules, two of which are proposed and one of which is final, address pay-for-performance disclosure, the clawback of erroneously awarded incentive-based compensation, and, perhaps most significantly, pay-ratio disclosure. Each of these rules was issued pursuant to outstanding rulemaking mandates imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Such rulemaking mandates were enacted in response to the economic recession in order to address excessive executive compensation. The rules require public companies to provide additional disclosure in their securities filings and to implement a new written clawback policy. Some of the underlying requirements of the rules have been met with fierce criticism. This article reviews the SEC's rules on these major compensation matters and summarizes their likely impact on public companies.

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Securities Enforcement and Corporate Governance Litigation