SEC Evaluating Executive Compensation Disclosures Through Roundtable Discussion

On June 26, 2025, the Securities and Exchange Commission (SEC) held a roundtable discussion on executive compensation disclosure requirements. In advance of the meeting, Chairman Atkins identified potential questions across three areas of discussion: the process of setting executive compensation and investment and voting decision-making; the evolution of executive compensation disclosure; and challenging issues related to executive compensation.

The roundtable featured three panels, with a variety of perspectives shared from representatives of public companies, financial institutions, investors, compensation advisors and law firms. The conversation largely focused on the effectiveness of the current executive compensation disclosure rules, whether the rules achieve the goals of the underlying legislation, and areas where the rules can be improved. Over the course of the afternoon, a few areas of agreement emerged:

• The benefits of some disclosures do not justify the costs. Panelists generally agreed that the preparation costs for the CEO pay ratio and Pay Versus Performance disclosures are not justified given the limited usefulness of such disclosures to investors. Some panelists suggested that disclosures that enable investors to track the life cycle of individual equity awards from grant to vesting would be more useful. Panelists also expressed concern about the one-size-fits-all approach adopted with respect to clawback policies, but also acknowledged that more time would be needed to fully assess the impact of the new clawback rules.
• Current disclosure rules encourage overly long and complex disclosures. Panelists debated whether current disclosure rules were encouraging overly complex and lengthy disclosures (and, in some cases, executive compensation programs) rather than more condensed and straight-forward disclosures. These effects were contrasted with those of the say-on-pay rules, which panelists suggested have led to companies adopting beneficial disclosure practices in response to investor engagement even when such disclosures are not expressly required by SEC rules.
• Perquisite requirements have unintended consequences. A number of panelists disagreed with SEC guidance that requires expenses related to executive security to be treated as perquisites, noting that it distorts company decision-making with respect to such expenses. Panelists also noted the relatively high compliance costs for perquisite-related disclosures, particularly in light of the relatively small portion of compensation attributed to perquisites and the fact that the amounts involved are generally immaterial to registrants. 

Based on Chair Atkins’ statement leading up to the roundtable as well as the commentary from the SEC Commissioners at the roundtable, it is clear that the SEC will be revisiting the compensation disclosure rules. Whether any proposed rule-making will constitute a rewrite or refinement of Item 402 of Regulation S-K is yet to be seen, but based on the commentary we expect that there will be significant rulemaking proposed. The SEC has encouraged interested parties to submit comments as soon as possible in order to be considered for any potential rulemaking. We encourage our clients to share their concerns and comments with the SEC. Please contact one of the authors below or your Sidley contact for assistance.