SEC proposal would reduce executive pay disclosures at many public companies 

The U.S. Securities and Exchange Commission (SEC) issued a proposed rulemaking on May 19, 2026, that would dramatically reduce the disclosure requirements for all but the largest publicly traded companies. This move is an effort to attract more companies to issue shares in the U.S. public capital markets.

As it pertains to executive compensation, the proposal reflects key priorities cited by the SEC: Reduce the disclosure burden on issuers through scaled requirements and simplification. For many of our clients, the proposal would:

• Eliminate say-on-pay proposals
• Reduce the extent of required disclosures, including pay vs. performance and CEO pay ratio
• Eliminate the Compensation Discussion and Analysis (CD&A)
• Decrease the number of Named Executive Officers (NEOs)

Many of the proposed changes include corporate governance issues beyond the executive compensation realm that should be explored with your counsel and auditors. These include:

• Easing filing deadlines for quarterly and annual reports
• Reducing the extent of auditor involvement in preparation of financial statements disclosures
• Removing several other required disclosures

The SEC forecasts that only 1,150 U.S. companies (19% of all U.S. publicly traded companies) would remain subject to current disclosure requirements, down from approximately 2,100 companies (35%) at present.

The key proposed changes are to consolidate the three current filing statuses into two: Large Accelerated Filers and Non-Accelerated Filers (Table 1). 

Table 1. Consolidating current filing statuses 

Large Accelerated Filers (LAFs) will remain the companies subject to the most stringent disclosure requirements and the earliest filing deadlines. To be considered a LAF under the proposed rules, a company would need to:

• Be publicly traded for 60 consecutive months (five years), an increase from the current threshold of 12 months; and
• Maintain a public float of at least $2 billion, up from the current threshold of $700 million.  Public float will be determined over two consecutive fiscal years rather than on the last business day of the second quarter for a single fiscal year.  

These rules have many complications for moving in and out of LAF status that must be closely studied for specific circumstances. Overall, companies that remain LAFs under this rulemaking would see little change to their executive compensation disclosure requirements under this proposal.  

Non-Accelerated filers (NAFs) would include all U.S. issuers that do not meet the LAF criteria. NAFs would enjoy a significant easing of SEC executive compensation-related compliance obligations:

• No shareholder advisory votes: No say-on-pay proposals, no say-on-frequency, and no say-on-golden-parachute
• Substantially reduced disclosure requirements:
  • No CD&A required
  • Three NEOs instead of five (the Principal Executive Officer plus the next two highest-paid executive officers; this means that the CFO’s compensation would not necessarily be required disclosure)
  • Two years of Summary Compensation Table information instead of three
  • Fewer compensation tables with only the Summary Compensation Table, Outstanding Equity Table, and Potential Payments upon Termination Table required; no requirement to include:
    • Grants of Plan-Based Awards Table
    • Options Exercised and Stock Vested Table
    • Nonqualified Deferred Compensation Table
    • Pension Benefits Table
  • No pay vs. performance disclosure  and no CEO pay ratio
  • Other reports and disclosures not required:
    • Compensation committee report and compensation policies and practices related to risk management  
    • Compensation committee interlocks and insider participation disclosure  
    • Item 201 performance graph disclosure in 10-Ks
    • Disclosure of risk factors required in 10-Ks or 10-Qs
    • Auditor attestation report under Sarbanes-Oxley section 404(b)  

As noted in Table 1, these changes would eliminate the Accelerated Filer (AF) and Smaller Reporting Company (SRC) filing statuses and would make Emerging Growth Company (EGC) filer status essentially obsolete. The rules also would create a new subset of NAFs: Small Non-accelerated Filers (SNFs), which are companies with assets of $35 million or less. These companies would benefit from extended deadlines for 10-Ks and 10-Qs.

Observations

These proposals shouldn’t come as a surprise, given they align with SEC comments from the past 12 months. This is a relatively simple approach to scale the disclosure burden based on financial maturity without requiring a full rewrite of highly technical rules.  

This approach provides stability for issuers that would remain LAFs, avoiding the costs incurred to comply with modestly adjusted rules. It quickly scales down requirements for future-state NAFs, while enabling them to retain existing methodologies for the consistent disclosure elements. However, it remains to be seen whether the SEC will follow this proposal with further amendments to executive compensation disclosure requirements more broadly (e.g., a re-thinking of how personal security benefits for executives are classified and disclosed).

With the removal of mandatory say-on-pay votes, there will be fewer avenues available to the investor community to express discontent and concerns about executive compensation. This may lead to greater focus on committee member re-elections, and is already a cited tactic in investor and proxy advisor voting policies.

The SEC’s comment period on these proposed rules runs for 60 days from publication in the Federal Register. The SEC will consider the comments it receives as it prepares its final rulemaking. Reactions from institutional investors will likely reflect a variety of viewpoints, although we expect that proxy advisors will be critical of fewer say-on-pay votes and the reductions in disclosures they’ve relied upon for their voting recommendations on executive pay. Final rules could potentially be issued this fall, but it is currently unclear whether any final rule would be effective for most companies’ 2027 proxy statements.  

Talk to an expert

Let’s discuss your organization’s unique needs.