Pay vs Performance

Key PvP Disclosure Requirements

The rules will apply to all reporting companies, except foreign private issuers, registered investment companies, and Emerging Growth Companies. Smaller Reporting Companies (“SRCs”) will be permitted to provide scaled disclosures.

New Item 402(v) of Regulation S-K will require registrants to provide a table disclosing specified executive compensation and financial performance measures for the registrant’s five most recently completed fiscal years.

Registrants will be required to include in the table, for the principal executive officer (“PEO”) and, as an average, for the other named executive officers (“NEOs”), the Summary Compensation Table measure of total compensation and a measure reflecting “executive compensation actually paid,” calculated as prescribed by the rule.

The financial performance measures to be included in the table are:

• Total shareholder return (“TSR”) for the registrant;
• TSR for the registrant’s peer group;
• The registrant’s net income; and
• A financial performance measure chosen by the registrant and specific to the registrant (the “Company-Selected Measure”) that, in the registrant’s assessment, represents the most important financial performance measure the registrant uses to link compensation actually paid to the registrant’s NEOs to company performance for the most recently completed fiscal year.

Item 402(v) also will require a registrant to provide a clear description of the relationships between each of the financial performance measures included in the table and the executive compensation actually paid to its PEO and, on average, to its other NEOs over the registrant’s five most recently completed fiscal years.

The registrant will be required to also include a description of the relationship between the registrant’s TSR and its peer group TSR.

A registrant will also be required to provide a list of three to seven financial performance measures that the registrant determines are its most important measures (using the same approach as taken for the Company-Selected Measure). Registrants are permitted, but not required, to include non-financial measures in the list if they considered such measures to be among their three to seven “most important” measures.

Registrants will be required to use Inline XBRL to tag their pay versus performance disclosure.

Implementation Dates: Registrants are required to comply with proxy statements for fiscal years ending on or after December 16, 2022.

• Large accelerated and accelerated filers will be required:
  • to provide three years of data in the first proxy or information statement which contains the disclosure,
  • adding another year of data in each of the two subsequent annual proxy filings that require the disclosure (for a total of five years).

• Smaller Reporting Companies (SRC) will:
  • Initially be required to provide two years of data,
  • adding an additional year of disclosure in the subsequent annual proxy or information statement that requires the disclosure.
  • Additionally, SRCs will only be required to report the data in Inline XBRL beginning in the third filing which contains pay versus performance disclosure, instead of the first.

Note: The rules do not apply to Foreign Private Issuers, Investment Management filers (such as Business Development Companies) or Emerging Growth Companies.

Official Resources

• SEC Final Rule
• SEC Fact Sheet

How RDG Filings Makes PvP Compliance Simple

RDG Filings simplifies Pay versus Performance (PvP) compliance with a full suite of support services tailored to SEC requirements:

• Inline XBRL Tagging Expertise: RDG’s core competency lies in accurate and fully compliant Inline XBRL tagging for all PvP disclosures, ensuring data is formatted to SEC standards.

• Proxy Statement Integration: RDG integrates the required iXBRL tags for the PvP table and related data points into your proxy statement as part of the EDGAR/XBRL conversion process.

• EDGAR Filing Services: RDG provides EDGAR filing services to handle the submission of proxy statements containing PvP disclosures, ensuring timely filing.