The so called “pay versus performance” proposal is aimed at making it easier for investors to determine if executives are being appropriately compensated. “The proposed rules, which would implement a requirement mandated by the Dodd-Frank Act, would provide greater transparency and allow shareholders to be better informed when they vote to elect directors and in connection with advisory votes on executive compensation,” the SEC said in a news release.
Under the proposed rules, companies would be required to adopt a standardized form of disclosing executive pay and comparing it to company performance, including a comparison to industry competitors, according to The Hill.
SEC Commissioner Luis Aguilar told The Hill the proposed rules will help curb cases where executives reap massive paydays while their companies flounder.
More articles on executive compensation:
Taking pay cuts: Why some hospital executives leave money on the table
12 commandments for compensation committees looking to improve governance
Healthcare executive compensation is adapting to new leadership competencies
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