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Companies and investors now have one year of experience with the SEC’s new pay versus performance (PvP) disclosure rules. Companies put tremendous effort into preparing these new disclosures which require companies to report a new compensation measure – Compensation Actually Paid (AP) – that reflects the year end value of unvested equity grants. Companies reported a three year history of CAP in 2023 but need to report a four year history in 2024 and a five year history in 2025 and later years. To help investors understand how pay is related to performance, companies have to report their own cumulative TSR for each year, cumulative industry TSR for each year, their own net income and the most important financial measure (after TSR and net income) for determining CAP.
In the first year, companies struggled to find the best way to tell their story about this complex disclosure. Investors and proxy advisors also struggled to understand the new disclosures and relate them to their proxy voting decisions and recommendations.
Join us in this CLE Webcast as The Knowledge Group presents two compensation experts to help companies and investors understand the new disclosures and how they can be used to assess company incentives, alignment with relative performance and compensation cost.
Key topics that will be covered in this discussion are:
- The New PvP Rule: An Overview of Key Components
- Understanding the PvP Table: Critical Insights
- Best Practices to Prepare for 2023 Proxy Disclosure Requirements
- How to Use the Data to Measure Key Pay Dimensions: Incentive Strength, Alignment and Cost
Learning Objectives:
- Define the key components and explore the implications of the new PvP (Pay vs. Performance) rule.
- Break down the PvP table to discern critical information regarding executive pay and company performance.
- Acquire skills to measure and analyze Incentive Strength, Alignment, and Cost within executive compensation.