The Securities and Exchange Commission (SEC) is very close to issuing a proposal that would cut back executive compensation disclosure requirements. The White House received a draft of the proposal on August 26, 2026, for review, according to a regulatory notice posted by the Office of Management and Budget.
It is unclear how long the White House review will take, but it is likely to be completed in the coming weeks.
The goal of this rulemaking project is to revise Item 402 of Regulation S-K to “rationalize” executive pay disclosure requirements.
The SEC has been routinely using the word “rationalize” since Paul Atkins became chairman in April 2025 to indicate efforts to scale back burdensome disclosure requirements that the current agency leadership deems immaterial to investors. Many companies have complained that executive compensation disclosure is too onerous to prepare and provides little value to investors.
“In many ways, Item 402 epitomizes the problems with the SEC’s disclosure rules overall,” Atkins said in a speech in Dallas, Texas in February. “The rules themselves are lengthy and complex, driven in part by piecemeal additions over the last two decades without a holistic review of how everything fits together. Having been chief of staff to then-Chairman Richard Breeden during the 1992 amendments to Item 402, I can say that the rule today has morphed into a Frankenstein monster beyond recognition.”
Item 402 requires, among other things, companies to provide:
- Compensation Discussion & Analysis (CD&A)
- Summary Compensation Table
- Equity and Incentive Compensation
- Pension and Deferred Compensation
- CEO pay ratio
- Pay versus performance (PvP)
- Clawback/recovery analysis
Potential areas of proposed amendments
The proposal, if issued, will reflect roundtable discussions held in June 2025 and comment letters submitted in response.
In Dallas, Atkins noted that a significant number of commenters have questioned whether the volume of detailed compensation information is necessary. The huge volume can bury important information.
“Requiring companies to devote extensive time and resources to prepare disclosure that can do more to obscure than illuminate is not rational,” Atkins said.
Today, disclosures for up to seven executives in a given year are required, and he said he agrees with commenters that the agency should reconsider the number of executives for whom pay information is provided.
Dodd-Frank’s pay-versus-performance rule might also be pared back as companies have complained about its complexities.
“All of the time and money spent on PvP disclosure has scarcely resulted in clear information to investors. Another commenter noted that the rule has ‘necessitate[d] further explanatory disclosure…to address any confusion…create[d] for investors.’ A regime that requires additional disclosure to explain the original disclosure is a signal that simplification is overdue,” Atkins said.
In addition, Atkins said the SEC should modernize the treatment of executive security as a perk.
Under rules adopted in 2006, security provided to executives at home or during personal travel was treated as a personal perk because it was not considered directly related to job performance. Atkins contended that this view is outdated, noting that today’s heightened security risks make around-the-clock executive protection increasingly necessary rather than a luxury.
However, investor protection advocates want the SEC to leave the rules alone and have engaged in letter writing campaigns. The commission received 1,031 form letters from individuals or entities asking the agency to maintain or even expand strong disclosure rules.
“By requiring corporations to disclose the ratio of CEO pay to median employee pay and how executive compensation relates to the company’s performance, people can support companies that don’t enrich their leaders while hurting their employees or the rest of the organization,” Type A letter states. “By allowing companies to claw back compensation given to executives based on false achievements, investors can feel safer knowing it’s harder for the company to be exploited.”
The SEC also received 94 Type B letters, which say “‘sunlight is the best disinfectant’ when it comes to curbing executive pay abuses.”
“The growing number of executive compensation plans and their increased complexity is the reason why executive compensation disclosure has increased in length,” the letter reads. “If companies find these disclosure requirements too burdensome, perhaps they should consider simplifying their senior executives compensation by, for example, eliminating perks like the personal use of corporate jets.”
Separate Reg S-K Reform
In the meantime, the regulator is working separately on a larger proposal to reform Reg S-K, which is a disclosure framework that specifies the non-financial information public companies must provide in filings, including business descriptions, risk factors, management discussion and analysis, executive compensation, and corporate governance disclosures.
The commission plans to issue a proposal in the fall, but it appears this will come later as the White House has not received a draft yet.
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