Yesterday on TheCorporateCounsel.net, Meredith shared a speech from SEC Chair Paul Atkins about “Revitalizing America’s Markets at 250.” One takeaway was that executive compensation disclosure reform is still very much on the Chair’s priority list – probably fitting under the umbrella of “Rationalization of Disclosure Practices” on the Reg Flex Agenda that was published a few months ago. Moreover, when they press the reset button, Chair Atkins’ speech suggests that a driving principle for any revised rules will be a focus on financial materiality.
Here’s an excerpt:
When the SEC’s disclosure regime has been hijacked to require information unmoored from materiality, investors do not benefit. In his recent and final Thanksgiving letter to shareholders, Warren Buffett highlighted a prime example of this hazard. Any summary I give cannot do justice to Mr. Buffett’s own words. So, I quote for you the following excerpt from his letter:
During my lifetime, reformers sought to embarrass CEOs by requiring the disclosure of the compensation of the boss compared to what was being paid to the average employee. Proxy statements promptly ballooned to 100-plus pages compared to 20 or less earlier.
But the good intentions didn’t work; instead they backfired. Based on the majority of my observations – the CEO of company “A” looked at his competitor at company “B” and subtly conveyed to his board that he should be worth more. Of course, he also boosted the pay of directors and was careful who he placed on the compensation committee. The new rules produced envy, not moderation.
The ratcheting took on a life of its own.
I share Mr. Buffett’s observations and concerns, which is why earlier this year, the SEC held a roundtable that brought together companies, investors, law firms, and compensation consultants to discuss the current state of the agency’s executive compensation disclosure rules and potential reforms. Somewhat to my surprise, there was universal agreement among the panelists that the length and complexity of executive compensation disclosure have limited its usefulness and insight to investors. We need a re-set of these and other SEC disclosure requirements, and this roundtable was one of the first steps to execute my goal of ensuring that materiality is the north star of the SEC’s disclosure regime.
Among other topics, Chair Atkins also reiterated his focus on disclosure accommodations for smaller and newly public companies – which may overlap with updates to executive compensation disclosure rules.
It may be too ambitious to hope for a rule proposal under the Christmas tree this year, but hey – my daughter is convinced she’ll get a unicorn. So, in the spirit of these holidays, I’m going to follow her lead and dream big. At any rate, it seems like it’ll be something to look forward to in the new year.
Meridian recently published its 2025 Corporate Governance & Incentive Design Survey. The survey contains 54 pages of benchmarking data, pulled from the latest proxy statements of 200 large-cap companies (median revenue of $25.4 billion and median market cap of $46.5 billion).
Here’s the scoop on proxy disclosure practices and compensation-related shareholder proposals:
– Compensation-Related Shareholder Proposals Decline; Support Remains Low: In 2025, 14% of companies received at least one compensation-related shareholder proposal. Most compensation-related shareholder proposals continue to receive limited shareholder support.
– Nearly All Companies Engage in Shareholder Outreach: 96% of the Meridian 200 disclose shareholder outreach efforts. 50% of the Meridian 200 provide specific details on feedback received and/or actions taken as a result of the feedback.
– SEC “Pay Versus Performance” Disclosures Remain Consistent: Consistent with last year, most companies (80%) choose to compare TSR against an industry specific index and a strong majority of companies (92%) use graphical disclosure to depict the relationship between “compensation actually paid” and performance.
Diving into shareholder proposals, the most common proposal topic that made it into company proxy statements related to ratification of severance pay. Aside from “other,” the second most common proposal encouraged companies to de-link pay from ESG metrics.
The decrease in compensation-related proposals was consistent with the decrease in number of Rule 14a-8 shareholder proposals across the board, a topic we’ve been covering on The Proxy Season Blog on TheCorporateCounsel.net. It will be interesting to see what happens in the coming season in light of this trend line and the gauntlet that SEC Chair Paul Atkins threw down a couple weeks ago.
The survey also covers annual & long-term incentive design practices, corporate governance practices, and clawback policies.
Tune in at 2:00 pm Eastern tomorrow — Wednesday, December 3rd — for our webcast “Equity Award Approvals: From Governance to Disclosure” to hear Jeff Joyce of Pay Governance and Sheri Adler and David Kaplan of Troutman Pepper Locke discuss common foot faults for equity award approvals and share best practices to help you dot your i’s and cross your t’s when awarding equity in 2026. Among other topics, this program will cover:
– Not Your Kindergartener’s Math: Share Counting
– Planning Ahead: Award Design
– Approval Formalities:
– Who Approves?
– What Gets Approved?
– Grant Timing, Sizing and Disclosure
– Documenting and Communicating Awards
Members of this site can attend this critical webcast at no charge. If you’re not yet a member, you can sign up by contacting our team at info@ccrcorp.com or at 800-737-1271. Our “100-Day Promise” guarantees that during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. The webcast cost for non-members is $595.
We will apply for CLE credit in all applicable states (with the exception of SC and NE which require advance notice) for this 60-minute webcast. You must submit your state and license number prior to or during the program using this form. Attendees must participate in the live webcast and fully complete all the CLE credit survey links during the program. You will receive a CLE certificate from our CLE provider when your state issues approval; typically within 30 days of the webcast. All credits are pending state approval.
This program will also be eligible for on-demand CLE credit when the archive is posted, typically within 48 hours of the original air date. Instructions on how to qualify for on-demand CLE credit will be posted on the archive page.
In this program, you will hear directly from Staff in the SEC’s Division of Corporation Finance about important takeaways from the Statement, the Staff’s procedural expectations for this year, and common questions. Additionally, Gibson Dunn’s Ron Mueller and Cooley’s Reid Hooper will be joining the program to share practical tips on navigating the new process – and its potential consequences for companies.
There are a few important things to know about this webcast that are different from our typical programming:
1. It’s free for anyone who wants to attend, even if you aren’t currently a member of TheCorporateCounsel.net. We want to do what we can to get the word out about the Staff’s approach so that the season is as smooth as possible for everyone (especially given the Staff’s workload after the shutdown).
2. It’s happening from 11:00 am – 12:00 pm Eastern.
3. Since this is a pop-up webcast, we aren’t offering CLE credit for this one. Members of TheCorporateCounsel.net can get lots of live and on-demand credits through our other programs, though! As you can see on that site’s home page, we have several good upcoming programs in December – including a program with former high-level Corp Fin Staff on December 11th, which will include practical guidance for companies to navigate this Rule 14a-8 process and other important SEC and Corp Fin initiatives.
There are a number of open issues to consider when it comes to how this year’s shareholder proposal process will play out, and you’ll want to have a strategy if you get a proposal relating to severance arrangements or other matters. So tune in tomorrow to hear the very latest on the Staff’s expectations and other practical pointers!