On August 25, 2022, the SEC adopted amendments to its rules governing disclosure of executive compensation.  The amendments are designed to show the relationship (or, possibly the lack of relationship) between the amounts paid to executives and the company’s performance. 

(By way of background, the amendments were mandated by the Dodd-Frank Act – yes, that Dodd-Frank Act – in 2010 but were not even proposed until 2015 and seemed to have been forgotten about until the SEC under Chair Gensler brought them back from the grave.  That may not be the longest regulatory gestation period in history, but it probably comes pretty close.)

It is important to note that these rules will be effective for the 2023 proxy season and will apply to all reporting companies other than emerging growth companies, foreign private issuers, and registered investment companies.  The key new disclosures in the rules are described below, although smaller reporting companies (SRCs) will be subject to scaled disclosure requirements.

  • The amendments will require a new table disclosing specified executive compensation (not necessarily what’s covered in the Summary Compensation Table) and financial performance measures for the five most recently completed fiscal years (three years for SRCs). 
  • The compensation information will have to be provided for the CEO and, as an average, for the other “Named Executive Officers.” 
  • The performance measures will include the company’s total shareholder return (TSR), the TSR of companies in its peer group, its net income, and a financial performance measure chosen by the company. 
  • Using the information in the table, a company will be required to describe the relationships between actual executive compensation paid and each of the performance measures, as well as the relationship between its TSR and that of its peer companies.  In addition, a company will need to provide a list of three to seven financial performance measures that it determines are its most important performance measures for linking compensation to performance. 

For the 2023 proxy season, companies will have to provide the required information for the prior three fiscal years, adding an additional year’s information in each of the following two proxy statements; however, SRCs will only have to include information for the prior two years in 2023 and to add one additional year in 2024.  And all companies will be required to use Inline XBRL to tag their pay-for-performance disclosures.

Institutional investors, academics, and others have long been skeptical of companies claiming (i.e, protesting too much) that their compensation philosophy is to pay for performance.  To the extent that the new disclosures call those claims into question, they may pose challenges far beyond “mere” compliance.

Please direct any questions or observations to Gunster securities law and corporate governance practice leader Bob Lamm.


This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.

About Gunster

Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 11 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Orlando, Palm Beach, Stuart, Tallahassee, Tampa, Vero Beach, and its headquarters in West Palm Beach. With over 220 attorneys and 200 committed support staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at


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