On June 26, 2025, the Securities and Exchange Commission (SEC) held a roundtable discussion on whether the current executive compensation disclosure framework for public companies can be improved. The roundtable, and certain of the commissioners’ public remarks, signal that the SEC may prioritize scaling back current executive compensation disclosure requirements. Commissioner Uyeda, in particular, stated that the SEC is overdue for a review of executive compensation disclosure rules, and implied that recent adoptions of executive compensation disclosure rules were aimed at addressing income and wealth inequality in the United States. According to Commissioner Uyeda, “it is inappropriate to use SEC regulations with the intent of addressing desired political or social outcomes with respect to income and wealth inequality in the United States. To the contrary, executive compensation disclosures should provide information material to an informed investment or voting decision.”
Two rules received particular criticism at the roundtable discussion:
- The requirement to disclose the ratio of chief executive officer compensation to median employee compensation (commonly referred to as the “CEO Pay Ratio” disclosure rule), adopted by the SEC in August 2015; and
- The requirement to disclose comprehensive information reflecting the relationship between executive compensation actually paid by a public company and the public company’s financial performance (commonly referred to as the “Pay Versus Performance” disclosure rule), adopted by the SEC in August 2022.
Commissioner Uyeda described certain aspects of the CEO Pay Ratio rule as having a “name and shame motivation” and Commissioner Peirce stated that feedback received on the Pay Versus Performance rule described it as a “regulatory tax on public companies without a corresponding benefit for investors.” Public companies should stay alert for possible changes to the CEO Pay Ratio and Pay Versus Performance rules or other aspects of the public company executive compensation disclosure framework.
