Total Shareholder Return (TSR)

Following seven years of “will they or won’t they,” on August 25, 2022, the SEC adopted final rules requiring information reflecting the relationship between executive compensation actually paid by a company and the company’s financial performance (“Pay vs. Performance”).  The rules were initially proposed in April 2015, and then languished for years (see HERE). On January 27, 2022, the SEC re-opened the comment period and expanded the proposal to include additional performance metrics (see HERE).

The SEC administration under Gary Gensler has been actively tackling compensation and insider trading related issues, including re-visiting executive compensation clawback rules (see HERE); publishing new guidance on disclosures and accounting for spring-loaded compensation awards (see HERE); proposing amendments to Rule 10b5-1 insider trading plans (see HERE); and proposing new share repurchase program disclosure rules (see HERE).

The amendments require companies to provide a table disclosing specified executive compensation and financial performance measures for their five most recently completed