Readers of this blog are well aware that the SEC is considering rule changes that would make ~80% of companies eligible for scaled disclosure (which is at the proposal stage) – and that could overhaul line-item executive compensation disclosure requirements across the board (proposal forthcoming). These changes may give companies more leeway to decide what to put in the proxy statement – balancing the heightened risks that may come with including voluntary disclosure in a proxy statement and 10-K. But for at least some companies, the proxy statement – and pay disclosures in particular – may continue to be a valuable communication tool that goes beyond the black & white requirements of the rules.
This Farient Advisors blog says that companies that treat the proxy as only a compliance document may risk eroding their credibility with shareholders over time – whereas those who clearly explain decision processes and pay outcomes can build the type of trust that becomes important if the company has an off year or needs to secure a key vote. The blog provides 5 tips for strengthening proxy disclosure – not by adding length and technical details, but by explaining decisions. Here’s an excerpt:
1. Frame Pay Outcomes as the Result of Active Decision‑Making
The most effective disclosures explicitly acknowledge the committee’s role as a decision‑maker, not just a program administrator. Strong proxies:
– Highlight the key questions the committee debated
– Explain how competing performance signals were balanced
– Describe how judgment was applied within the incentive framework
This reinforces that pay outcomes reflect governance oversight, not automatic formula execution.
2. Provide Context Around Goal‑Setting Rigor
Shareholders are increasingly focused on whether goals were demanding when established, not simply whether they were achieved. Boards can improve disclosure by:
– Describing goal difficulty in directional terms
– Explaining how targets reflected business conditions at the time they were set
– Clearly articulating the rationale for any adjustments
The objective is not to disclose proprietary targets but to give investors confidence that the goals were set with appropriate rigor.
3. Treat Discretion as a Governance Decision Worth Explaining
When boards exercise discretion, the proxy should reflect the seriousness of that decision. Effective disclosure:
– Explains why discretion was necessary
– Describes alternatives considered
– Clarifies how the decision supports long‑term value creation
– Addresses whether the action sets a precedent
The more unusual the decision, the more important it is to articulate the board’s reasoning.
This blog from Meredith is also a helpful resource if your company is considering changing proxy disclosures in response to SEC rulemaking.
A few of our members have informed us that the Glass Lewis window for peer group submissions is open – through August 14th – for companies with annual meetings between October 2026 and February 2027. Glass Lewis shares the info by email to the designated company contact, rather than making a public announcement like ISS. In order to receive these emails about peer group submission windows, you need to opt in.
As I’ve shared in years past, not every company needs to submit something during this window. You really only do it if your peer group has changed since your last proxy statement and you want to make sure the proxy advisor considers that. Glass Lewis lists these reasons for why you may wish to update your peer group:
1. You recently disclosed an updated peer group on your website, Form 8-K, or elsewhere in the public domain, but it’s not in your most recent Form DEF 14A or Management Information Circular.
2. Your most recent proxy statement includes two peer groups (e.g., one for fiscal 2025 and another for fiscal 2026). Confirm your preferred peer group by submitting it.
3. You publicly disclosed your fiscal 2026 peer group with changes for fiscal 2027, but without listing the full fiscal 2026 group. Submit an update to confirm the fiscal 2026 peer group.
Glass Lewis has Glass Lewis has a rigorous, state-of-the-art peer methodology that informs our Pay-for-Performance Model, and our Say on Pay recommendations. Beginning with a company’s self-disclosed peers, Glass Lewis then includes investor views on both industry-based and country-based peers, in addition to the company’s peers-of-peers. This approach ensures additional screens based on corporate revenue, market capitalization, and assets; weightings also consider the source and frequency of confirmation, and peer rankings are based on a strength-of-connection approach that considers all potential peers, not just those resulting from the network effects of corporate disclosures.
To submit an updated peer group, you’ll need to carefully follow the instructions on this page. Note that the Peer Group Submission document was updated this year – so don’t use the old version. You also need to make sure to use the Glass Lewis portal to submit your information, as email submissions won’t be accepted.
We will get the latest scoop from ISS & Glass Lewis at our upcoming “Proxy Disclosure & 23rd Annual Executive Compensation Conferences” – happening October 12-13 in Orlando and virtually. Register now to ensure you get the information you need for your 2027 proxy season. You can register online or by contacting us at info@CCRcorp.com or 1-800-737-1271.
I don’t want to get too far ahead of ourselves with speculating about potential changes to the SEC’s executive compensation disclosure rules. But I will note that despite overall exuberance on the company side about the prospect of less onerous disclosure, there is also some acknowledgement that companies could lose benchmarking insight that is currently available through proxy disclosures. So, get it while you can! Mark Borges continues to share noteworthy proxy disclosure examples on his “Borges’ Proxy Disclosure Blog.” Here are a few of Mark’s recent updates addressing various aspects of compensation disclosures:
Mark doesn’t simply flag the disclosure – although even that is helpful! He also adds context and commentary from his years of experience. Members of this site can visit the blog – and can sign up to get that blog pushed out to them via email whenever there is a new entry. All you need to do is click the link on the left side of the blog and enter your email address.
If you aren’t yet a member with access to the Borges’ Proxy Disclosure Blog and all of the other resources on this site – such as our checklists, resource libraries, and the essential Lynn & Borges’s “Executive Compensation Disclosure Treatise” – email info@ccrcorp.com, call 1.800.737.1271, or sign up online.
Secondary peer groups — ”Supplemental peers,” “Reference peers,” etc. — are more prevalent now because they can contextualize programs and practices in the broader talent market. For example, the pay programs, performance leverage, and equity usage at industry-dominant companies are important information, even if the value of CEO pay is not a valid comparison.
Questions for the board:
1. Does the primary peer group sufficiently reflect sources and destinations of executive talent?
As Liz shared last week, ISS recently announced the launch of its Annual Global Benchmark Policy Survey, and there are a number of key, compensation-related questions. This Pay Governance alert goes into more detail on the content of those questions and shares some expectations for what these questions signal at this early stage. For example, here’s what the alert says about the question focused on whether competitive harm is a compelling rationale for not disclosing forward-looking LTI performance targets:
ISS is seeking investor views on whether concerns about competitive harm justify a company’s decision not to disclose forward-looking long-term incentive performance goals. The survey explores whether ISS should give weight to:
– Retrospective disclosure of goals and outcomes;
– Whether metrics are relative or absolute goals; and
– Company-specific explanations for nondisclosure.
Pay Governance shares this color:
Many companies view prospective disclosure of LTI goals as problematic because it may:
– Reveal competitively sensitive information;
– Be interpreted by analysts and investors as financial guidance; and
– Create unintended expectations regarding future performance.
A practical approach may involve:
– Explaining in the CD&A how performance goals were established and why management believes they are rigorous;
– Describing the governance process used to set targets; and
– Providing comprehensive retrospective disclosure of goals, performance ranges, and outcomes once performance periods conclude.
ISS acknowledges that relatively few companies provide forward-looking LTI goal disclosure. Market data provided by ESGAUGE indicates that forward disclosure rates remain below 20% for most performance metrics, with relative total shareholder return (TSR) plans representing a notable exception.
In her “Deep Quarry” Substack newsletter, Olga Usvyatsky has been reporting her observations on Dodd-Frank clawback disclosures. Her latest newsletter reports these data points on disclosures for the first half of 2026:
– The number of companies with an error correction flag declined to 142 in the first half of 2026, compared with 169 in the first half of 2025 (down 16% year over year) and 206 in the first half of 2024 (down 31% over two years).
– The number of companies indicating that they performed a recovery analysis declined to 57 in the first half of 2026, compared with 70 in the first half of 2025 (down 19% year over year), but remained substantially above the 29 reported in the first half of 2024 (up 97%).
– The number of companies providing recovery analysis disclosures declined sharply to 25 in the first half of 2026, down from 48 in the first half of 2025 (down 48% year over year), but remained above the 18 reported in the first half of 2024 (up 39%).
– Clawbacks remained rare, with 4 companies disclosing compensation recoupment during the first half of 2026, compared with 6 in the first half of 2025 (down 33%) and 2 in the first half of 2024 (up 100%).
– At the same time, several companies reported that their clawback analysis remained in progress. Four companies disclosed that their recovery analysis had not been completed by the filing date, compared with 2 in the first half of 2025 (up 100%) and none in the first half of 2024.
She notes that the 2026 decline is primarily attributed to the first quarter, since the second-quarter activity was mostly comparable year over year, and that the 2024 restatement levels were probably influenced by Borgers-related re-audits. I’m surprised at the second bullet point since the situations where the first box would be checked but not the second are fairly limited, but maybe voluntary restatements are more common than I realized. See this Cooley “Guide to the 10-K Clawback Checkboxes” posted in our “Clawbacks” Practice Area.
As Liz shared yesterday on TheCorporateCounsel.net, we had a lot of folks rushing to sign up last week for our “Proxy Disclosure & 23rd Annual Executive Compensation Conferences” – which are being held on October 12-13th in Orlando and virtually. Our “Early Bird” rate was set to expire on July 24th, but several members told us that they’ve been traveling and busy in July and they needed a few more days to get internal approval.
We want to do what we can to help, so we’re extending our “early bird” reduced rate by one week. Register by the end of this Friday, July 31st, to save on your in-person or virtual registration! You can register online or by contacting us at info@CCRcorp.com or 1-800-737-1271.
Here are the agendas for the Conferences – 14 sessions over two days – with a terrific speaker lineup, valuable course materials, and on-demand replay of all sessions for a year after the event:
– Christina Thomas: The Latest From Corp Fin
– The SEC All-Stars: Proxy Season Insights
– The Fate of Shareholder Proposals
– Fireside Chat with Top Activism Defense Lawyers
– Scary Stories to Tell in the (Securities Law Conference Spot)light
– Keeping Governance In Focus When the Future Is Hazy
– The SEC All-Stars: Executive Pay Nuggets
– Your Compensation Disclosures: New & Improved (We Hope)
– The Top Compensation Consultants Speak
– Bodyguards & Private Jets: Perks on the Radar
– Navigating ISS & Glass Lewis
Our early bird rates apply to both in-person and virtual attendance, so register online or contact us at info@CCRcorp.com or 1-800-737-1271 before the reduced rates expire – this Friday, July 31st!
Pay Governance’s latest viewpoint discusses considerations for pre-IPO companies considering the size of their initial equity plan share pools. In addition to sharing their own thoughts and tips, they base their recommendations on a review of 80 equity plans adopted by companies that went public in early 2026 and compared what they found with their 2022 findings. Here are their high-level takeaways:
– Share pool reserve: The median at-IPO reserve is 8.9% of fully diluted shares outstanding (“FDSO”), slightly above the 2022 median of 8.7%
– Overhang at IPO: Median overhang is 15.1% of FDSO, a modest increase from our 2022 study (14.4%)
– Evergreen provisions: Automatic annual refresh provisions (i.e., evergreens) remain highly prevalent at IPO, appearing in 80% of plans reviewed, representing a slight increase from our 2022 study. The most common evergreen amount was 5% of common shares outstanding (“CSO”)
– Industry differentiation: Life sciences and technology companies continue to be heavier equity users than other industries
Beyond these median data points, the viewpoint stresses that companies should consider their equity strategy and allocation levels and how those compare to peers in their industry, since that may be indicative of shareholder expectations.
If you haven’t already registered for our annual “Proxy Disclosure & 23rd Annual Executive Compensation Conferences” – happening October 12-13 in Orlando and virtually – now is the time to act! Our early bird rate expires tomorrow, July 24th. (The hotel block is going fast too – a lot of folks are taking advantage of the location and wrapping in family fun!)
Over on TheCorporateCounsel.net, Dave and Merdith recently elaborated onhow our sessions will help you understand the impact of the SEC’s regulatory agenda on your 2027 proxy season. We encourage you to use these blogs to help convey to your boss and colleagues the value that you can get out of attending our conferences before the early bird rate expires! Go check out our full agenda and speaker bios for even more detail.
Our early bird rates include discounts on both in-person and virtual attendance, so register online at our conference page or contact us at info@CCRcorp.com or 1-800-737-1271 before it expires tomorrow, July 24!
– Whether discretionary bonus programs warrant different sector-specific treatment for financial services companies rather than generally being treated as a concern in the qualitative pay-for-performance evaluation since financial services companies indicate that formulaic bonus structures are incompatible with applicable regulatory and risk management requirements
– Whether enhanced disclosure around the use of discretion by financial services companies would mitigate concerns
– How to signal significant concerns regarding executive pay when no say-on-pay vote is on the ballot given that more companies may be exempt if the SEC’s “Filer Status” proposal is adopted (e.g., whether to vote against compensation committee members and which members) and what support level for compensation committee members should be considered a low vote that triggers ISS’s responsiveness policy (the 50% director election threshold or the 70% say-on-pay threshold)
– Whether and when the risk of competitive harm constitutes a compelling rationale for not disclosing forward-looking LTI performance targets
– Whether the rationale of potential competitive harm is less compelling for relative metric goals than for absolute metric goals
The survey is scheduled to close on August 14, 2026, at 5 p.m. ET. In addition to the survey, ISS will conduct a series of regional, topic-specific roundtable discussions.