U.S. Securities and Exchange Commission Chair Paul Atkins spoke at the Texas A&M School of Law Corporate Law Symposium, which focused on exploring potential state-level reform to promote public company participation in capital markets. He also used the opportunity to share views on reforming the SEC disclosure regime, including Item 402 and executive pay disclosures.
His comments align with the tone of prior speeches, with the biggest takeaway being that he has formally requested the Corporate Finance staff to start drafting its proposals for simplifying these disclosures. Beyond that, we heard about areas of concern to Atkins, but he did not provide greater insight into much of the nitty gritty that might be subject to change.
Atkins reaffirmed two ideals that have been a thread throughout the SEC’s review of executive compensation disclosures, since the initial roundtable held in May 2025. Atkins likened the rules as we know them today to a “Frankenstein monster,” and noted that disclosure reform should follow two ideals:
Consistent with messaging from the SEC in the past nine months, Atkins cited concerns about the volume, complexity and lack of relevance in disclosures today, along with the cost and time required to prepare them. To achieve a desired state of modern and simplified disclosure rules and resulting reporting, Atkins distilled his views into three key principles.
Currently, companies must disclose detailed pay information for up to seven executives — or more if there are multiple principal executive and financial officers during the year.
Comments cited by Atkins noted that details beyond the CEO often are viewed as immaterial to investors, may obscure important information and create an imbalance between cost and value. Atkins signaled reconsideration (i.e., a reduction) of how many executives must be included.
The pay-vs.-performance rules approved by the SEC in 2022 were cited by Atkins based on comments noting that the confusing and complex disclosure is also difficult and costly to prepare.
Atkins noted that despite the time and money spent on these disclosures, it “has scarcely resulted in clear information to investors” and was an opportunity for simplification — both in preparation by issuers and for investors to understand.
Atkins’ final principle focused on modernization and, as an example, used the treatment and reporting of executive security as a perk.
Atkins noted the 20 years since this was last considered by the SEC and cited comments noting how the world has changed since. Atkins suggested the rules should be reviewed to better reflect today’s operating environment and the criticality of security for many executives to effectively perform their duties.
Atkins concluded by talking about broader themes that should guide reform across Regulation S-K. These included:
Atkins’ speech strikes a consistent tone and sentiment with other messages from the SEC in the past nine months. It is reasonable to expect changes that will reduce executive compensation disclosure requirements for companies, although it is hard to forecast how soon new rules will be proposed and when they would be finalized.
While his examples focused on the number of named executive officers, pay-vs.-performance and executive security (which, as we reported last year, prompted more divergent views among roundtable panelists), we anticipate changes across a broader range of areas.
For now, we recommend companies remain focused on clear, concise executive pay disclosures that provide the necessary supporting rationale to support key decisions. With changes seemingly on the horizon, our view is that making wholesale changes to existing elements of proxy disclosures are likely not a good use of company resources.
When updated requirements are released, we expect companies will undertake a detailed review of how to best comply with potentially less detailed disclosures and will consider what, if any, voluntary disclosure to retain or add. Shareholders and other observers likely will make known their own expectations and preferences that may differ from SEC requirements.
Then, issuers will need to balance competing disclosure priorities to ensure continued trust and build investor confidence that executive pay programs and decisions align with business needs and strategic priorities.
The SEC continues to accept responses, which can be submitted online or in writing.
