On Thursday, August 25th, 2022, the Securities and Exchange Commission (the “SEC”) adopted amendments that will require registrants to disclose information reflecting the relationship between executive compensation actually paid by a registrant and the registrant’s financial performance. These rules implement the so-called “pay-versus-performance” disclosure requirements prescribed by Section 953(a) of the Dodd Frank Act. This rule was first proposed in 2015 and the comment period was reopened in January 2022, nearly twelve years after Congress directed the SEC to create such a rule. This rule is intended to provide shareholders with a more clear and digestible understanding of the relationship between “executive compensation actually paid” (described below) by a company and the company’s overall financial performance.
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