The Advisors' Blog

Comments on the SEC’s reopened “Pay versus Performance” proposal were due March 4. The SEC has continued to welcome submissions after that deadline, and letters have continued to roll in as recently as this week. You can view all of the comments submitted – from 2015 to present – on the SEC’s website. Here are a few notable ones:

– Principles for Responsible Investment

– Dimensional Fund Advisors

– CalSTRS

– CII

– NIRI

– AllianceBernstein

– Davis Polk

– National Association of Manufacturers

– Aon Human Capital Solutions

– ICGN

Many recent comment letters re-hashed concerns previously raised in response to the 2015 proposal. Generally, the investors leaned in favor of additional pay disclosure, but the issuer-side found them overly prescriptive, irrelevant in certain cases, and burdensome. Several of the recent letters brought up discussion points on how ESG metrics may fit in with the proposed rules – AllianceBernstein suggested that companies using ESG metrics should describe the metric’s relationship to the long-term business strategy and other financial metrics to avoid a “check-the-box approach” to ESG metrics in exec compensation; CalSTRS suggested directing companies using ESG metrics to “select metrics from a suitable standard” like SASB. Some of the comments also cut in favor of including a GAAP reconciliation for non-GAAP pay targets.

As was the case in 2015, the Staff has a lot to consider – and companies may want to consider how the proposed rule would impact their compensation programs & disclosures, if adopted. We will be tracking developments!

– Emily Sacks-Wilner