Board members of the Public Company Accounting Oversight Board (PCAOB) voted unanimously to cut the spending plan by 9.4% for 2026, as well as to implement large cuts to their pay during a public meeting on December 19, 2025.
The 2026 budget is set at $362.1 million, compared to the approved 2025 budget of $399.7 million, which was an increase of 3.9% over the 2024 budget of $384.7 million.
Board members will see their salaries reduced by 52% for the chair and 42% for other board members next year. This is the first time their pay has been cut since board members received an increase in 2009, when the chair’s compensation was set at $672,676 and the four other members’ remunerations were set at $546,891. These figures have remained unchanged for 16 years, through this year.
The PCAOB did not immediately respond to a request for exact salary figures, but the 2026 pay for the chair is expected to be about $323,000, and $317,000 for the other members. Notably, the pay difference between the chair and the rest of the members is being sharply reduced.
The reductions are not surprising given expectations by Paul Atkins, chair of the Securities and Exchange Commission (SEC), which oversees the PCAOB. Its annual budget and auditing standards must be approved by the commission before becoming effective.
“The Commission’s review of the PCAOB’s annual budget is an important element of the Commission’s oversight of the Board, and I expect that an evaluation of Board member compensation will be among the items the Commission considers in connection with its review of the Board’s 2026 budget,” Atkins said in a statement on July 23.
Moreover, Atkins was a critic of the large pay given to board members when he was a commissioner from 2002 to 2008. In 2007 Atkins voted against the PCAOB’s 2008 budget, objecting to a 3.3% increase in board member salaries.
“As a matter of policy, I believe the board’s salaries are disproportionately high,” said Atkins at the time, as he displayed a chart comparing PCAOB salaries with those from executives at not-for-profit organizations and government agencies.
The 2008 budget raised then-chairman Mark Olson’s salary to $654,353 per year from $632,400, and each board member’s pay to $532,000 from $515,000.
The 2026 budget also includes “salary reductions for our most highly compensated staff, but not for most of our staff,” said Acting Chief Operating Officer (COO) Randy Thornton.
Personnel costs make up about 75% of the PCAOB’s entire budget at $272.9 million.
PCAOB Acting Chair George Botic said that the headcount at the end of 2026 is expected to be 817, which is 47 positions fewer than the 864 at December 2025.
Accounting Support Fees
Section 109 of the Sarbanes-Oxley Act of 2002 authorizes the PCAOB to collect accounting support fees from public companies and broker-dealers to fund its operations and supervise public accounting firms. Such fees in 2026 will be $306 million, compared to $375.9 million in 2025, an 18.4% reduction.
The portion allocated for issuers is $280.3 million, and it is $25.7 million for broker-dealers.
Sarbanes-Oxley established the PCAOB following accounting scandals at Enron and WorldCom two decades ago.
The 9.4% reduction, while not insignificant, does not represent a major cut, especially as the SEC, which has a much larger mandate to oversee the entire capital market system, has experienced a 15% reduction in staff compared to early 2025. The loss in some cases was 40% in certain divisions, including the Office of the Chief Accountant and the Division of Corporation Finance.
The manpower drop in part comes as President Trump pursued a downsizing of the federal government through buyouts and reduction in force. The PCAOB is technically not a government entity.
Acting Chair Botic defended the 2026 budget.
“Although the 2026 budget is nearly 10% lower than the 2025 budget, it is worth nothing that as we end the year, our 2025 spending is itself running about 6% under the 2025 budget,” Botic explained. “So, our 2026 budget is not the sharp drop-off it might at first appear to be, but rather, it is a continuation of a belt-tightening that is already underway. And I am satisfied that even with that continuation in 2026, the PCAOB will be equipped to execute its statutory mission with the necessary level of quality and rigor.”
Even as outgoing PCAOB member Christina Ho supported the 2026 spending plan, she thought it was a missed opportunity. Ho, who has previously voted against increases in the budget, believes that new board members—yet to be named by the SEC—are likely to continue cost savings in the coming years.
“While the approximately 9% decrease is not insignificant, it pales in comparison to the approximately 40% increase in the PCAOB’s budget between 2022 and 2025,” Ho said.
She pointed that the PCAOB has historically “padded” its budget.
“In my dissenting statement for the 2025 Budget, I questioned the need for the approximately 4% budget increase noting that since 2018, the PCAOB has consistently underspent its budget by over 7% on average,” she said. “And I was right about the PCAOB not needing the 4% increase in 2025, because it appears that the PCAOB will underspend its 2025 Budget by approximately 6%. Our consistent ‘underspend’ from 2018 to 2025, suggests that the PCAOB could have and should have a deeper budget decrease than the approximately 9% decrease before us today.”
PCAOB member Kara Stein, however, emphasized that auditing and its oversight are not simple but are very important to investors. The board has a single mission to protect investors.
“And while no organization is perfect, our genuine strengths have enabled the PCAOB to modernize decades old audit standards and raise the level of audit quality for the benefit of investors and the integrity of our capital markets,” Stein said.
She pointed out that Sarbanes-Oxley authorizes the PCAOB to compensate its employees to give salaries at a level that is comparable to the private sector.
“That statutory provision has been an essential policy tool for enabling the PCAOB to be effective in regulating what I said before, a complex and vitally important profession,” Stein said.
The PCAOB’s budget approval comes about a month late because of the 43-day government shutdown that affected the SEC. It is unclear exactly when the commission will vote on the board’s budget, but it will be in the coming weeks.
PCAOB’s 2026 Budget in More Detail
Thornton said that the 2026 budget is about a 4% reduction from the estimated 2025 spending because it is running about 6% below the 2025 approved budget.
The rest of the budget, or non-personnel costs, are as follows:
- Consulting and professional fees at $ 28.5 million or 8% of the budget
- Rent and other facilities costs, including capital expenditures at $20 million or 5% of the budget
- Information technology $16.2 million or over 4% of the budget
- Travel related costs at $15.9 million, which is about 4% of the budget. Inspections account for 93% of travel expenses.
- Administrative expenses at $8.8 million, which is about 2% of the budget.
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