The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

January 15, 2025

Human Capital Management: How to Tweak Your 10-K Disclosures

As you turn to the human capital management disclosures in your 2024 Form 10-K, this Gibson Dunn article may help you with benchmarking disclosures and considering tweaks you may want to make to your drafting this year. “Tweaks” does seem to be the right word here since one of the takeaways noted from the firm’s survey of S&P 100 disclosures over the last four years is that “companies are generally making only minor changes to their disclosures year over year, and these minor changes generally included shortening of company disclosures, maintaining or decreasing the number of topics covered, and including slightly less quantitative information in some areas.” Here are some specific trends highlighted in the alert:

– Length of disclosure.  Fifty-seven percent of surveyed companies decreased the length of their disclosures, 34% increased the length of their disclosures, and the length of the remaining 9% remained the same.

– Number of topics covered. Forty-one percent of surveyed companies decreased the number of topics covered, 13% increased the number of topics covered, and the remaining 46% covered the same number of topics.

– Breadth of topics covered.  Across all companies, the prevalence of 10 topics increased, nine topics decreased, and nine topics remained the same. The most significant year-over-year increases in frequency involved Culture Initiatives (30% to 35%) and Pay Equity (48% to 50%) disclosures. The most significant year-over-year decrease involved COVID-19 disclosures, which declined in frequency from 34% to 1%.  Other year-over-year decreases related to disclosures addressing Diversity Targets and Goals (21% to 14%), Diversity in Promotion (29% to 26%), Quantitative Diversity Statistics regarding Gender (63% to 60%), and Community Investment (28% to 25%).

– Most common topics covered.  This year, the topics most commonly discussed generally remained consistent with the previous two years.  For example, Talent Development, Diversity and Inclusion, Talent Attraction and Retention, Employee Compensation and Benefits, and Monitoring Culture remained the five most frequently discussed topics.  The topics least discussed this most recent year, however, changed slightly from that of the previous year as COVID-19 disclosures, and Diversity Targets and Goals dropped into the five least frequently covered topics.

– Industry trends. Within the technology and finance industries, the trends that we saw in the previous year regarding the frequency of topics disclosed generally remained the same.

Meredith Ervine