Pay Versus Performance

On August 25, the SEC released the final rule on the long-awaited pay versus performance (PvP) disclosure required under Section 953(a) of Dodd-Frank. The rule adds Item 402(v) to Regulation S-K, which companies are required to comply with in proxy and information statements for fiscal years ending on or after December 16, 2022.

The PvP disclosure is an amalgamation of realizable and realized pay, and the required disclosure will easily rank as the most complex one in the proxy. It stands in contrast to the Summary Compensation Table (SCT) framework, which depicts the deal struck at grant without any mechanism for showing how performance-based features operate to index pay to performance.

Get on top of the new rule with our collection of insights. Need help with adoption, compliance, and strategy? Check out our PvP valuation and advisory services, or just contact us directly.

Disclosing PvP Relationships, Part 3: Decision Criteria

Takis Makridis · 1/19/2023

In the final installment of our series, we lay out key considerations in determining a disclosure strategy for pay vs. performance relationships.

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Disclosing PvP Relationships, Part 2: Disclosure Archetypes

Takis Makridis · 1/5/2023

In Part 2 of our series, we walk through six archetypes for disclosing pay vs. performance relationships under the SEC’s rule.

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Disclosing PvP Relationships, Part 1: Types of Relationships

Takis Makridis · 12/21/2022

In the first of a three-part series, we review how to analyze pay vs. performance relationships and introduce some of the relationship types we’ve seen.

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Item 402(v) Pay vs. Performance Disclosure Readiness Checklist

Takis Makridis · 11/19/2022 

Use this checklist to help you prepare for disclosure under the SEC’s new pay vs. performance rule. 

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Pay Versus Performance Is Here, Part 3: Valuing Stock Options for Compensation Actually Paid

Takis Makridis, David Outlaw and Josh Schaeffer, PhD · 10/26/2022 

One aspect of the new pay versus performance rule is valuing outstanding employee stock options to calculate CAP. But which model should you use, and how should you estimate the inputs? Walk through the options in this article. 

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Pay vs. Performance: Your Questions, Our Perspectives

David Outlaw, Raenelle James, Takis Makridis, Therese Sebastian and Bradley Hayes · 10/26/2022 

This webcast is a panel discussion on the SEC’s new pay vs. performance rule. Tune in for answers to the most frequently asked questions we’ve received on how to implement and comply with the rule’s design. 

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Inside the SEC’s New Pay vs. Performance Rule

Takis Makridis and Bradley Hayes · 9/21/2022 

On August 25, the SEC finalized its highly anticipated pay vs. performance rule. In this webcast, we’ll review the final rule, look at various scenarios, and go over some of the questions we’re receiving from our clients. 

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Pay Versus Performance Is Here, Part 2: Understanding Compensation Actually Paid

Takis Makridis and Bradley Hayes · 9/20/2022 

Now that the SEC released the final pay versus performance rule, let’s look at the logic and mathematics behind the core disclosure table. 

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Pay Versus Performance Is Here, Part 1: Overview and Action Items

Takis Makridis · 8/29/2022 

Get our initial take on the SEC’s long-awaited pay versus performance disclosure rule, an overview of its key elements, and an action plan to execute now. 

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What You Need to Know About the SEC’s (Re-) Proposed Pay vs. Performance Rule

David Outlaw · 2/08/2022 

In January 2022, the SEC reopened the comment period on the proposed “pay vs. performance” rule. What’s in the rule, and what can you do to prepare? 

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Financial Performance Assessment: The New ISS Pay-for-Performance Test

David Outlaw and Takis Makridis · 11/28/2017 

As predicted, ISS is broadening their quantitative test to include relative financial metrics. As much as TSR has come under fire as a metric, other metrics can often raise even more issues to manage. 

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Understanding the Impact of the SEC Pay vs. Performance Disclosure Rules

Takis Makridis · 6/8/2016 

Presented at the 2016 World at Work Total Rewards Conference in San Diego, CA, this session reviews the current status of the proposed rules and provides guidance on what compensation professionals can be doing now to get ahead of these changes. 

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The SEC’s Proposed Pay-Versus-Performance Disclosure Rule Explored

David Outlaw · 12/11/2015 

Join Equity Methods’ David Outlaw and a panel of key thought leaders in this live webcast hosted by The Knowledge Group. 

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SEC Pay vs. Performance Disclosure – Initial Perspectives on the Proposed Rules

David Outlaw · 5/29/2015 

SEC has released its long-awaited proposed guidance on pay-for-performance disclosures. Get Equity Methods’ take in this 30-minute, on-demand webinar. 

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What You Need to Know About the SEC Pay-for-Performance Proposal

David Outlaw and Fan Wang · 5/14/2015 

The SEC’s proposed rules aim to create a standard measure that lets shareholders compare performance across companies. But what’s in a standard measure? 

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