In the latest episode of “The Pay & Proxy Podcast,” I was joined by Cleary partner, Julia Petty. We discussed:

1. What we know about the status of the SEC’s executive compensation disclosure reform efforts
2. Highlights from the letters submitted in response to the SEC’s request for public comment
3. The SEC’s suspected areas of focus in any anticipated rule proposal
4. How the SEC’s May 2026 “Filer Status” proposal will impact executive compensation disclosures and Say-on-Pay
5. Potential complications for equity practices for companies that take advantage of semiannual reporting, if the SEC’s “Semiannual Reporting” rulemaking is finalized as proposed

If you have insights on compensation and proxy disclosures you’d like to share in a podcast, I’d love to hear from you. Email me at mervine@ccrcorp.com.

– Meredith Ervine 

Last month, Liz shared part one of a two-part Pay Governance alert series regarding issues that are receiving the greatest attention in board meetings today. Part one focused on the external environment, regulatory landscape, investor landscape and proxy voting dynamics. Recently released part two focuses on compensation strategy – specifically how “boards are adapting their compensation programs and governance practices to address changing workforce dynamics, evolving leadership models, and emerging organizational risks.” If they’re not already, you may want to ensure these topics are on your compensation committee agenda to be discussed in the near future:

– Stick with PSUs or “Go Long”?

– Evolution from ESG Metrics to Broader Human Capital Focus

– Differentiating High Performers and Top Skills

– Navigating Shifts Toward Split Leadership Structures

– Continued Focus on Executive Security

The alert goes into detail on each of these topics. Here’s what it has to say about the evolution of ESG metrics:

Rather than abandoning strategic measures altogether, many companies have shifted toward broader human capital-focused priorities in incentive programs. Metrics such as employee engagement, recruiting, retention, turnover, and talent development have remained prevalent. At the same time, traditional ESG metrics continue to be more widely utilized in Europe and other select international markets, where stakeholder expectations and regulatory frameworks are more supportive. For compensation committees, the implication is not simply replacing one set of metrics with another, but ensuring incentive plans continue to reinforce the strategic drivers of long-term value creation.

– Meredith Ervine 

A recent academic paper featured in the CLS Blue Sky blog reported on the results of a study that sought to determine whether and how board refreshment impacted board decisions. As the latest Semler Brossy newsletter highlights, the authors found that refreshed boards are more likely to replace underperforming CEOs and more likely to pay for performance. The blog concludes:

[T]he results suggest that refreshed boards do not just look different. They appear to monitor differently. They are associated with stronger CEO dismissal discipline after poor performance and with stronger CEO pay structures that better connect performance and risk.

We also find that refreshment is associated with stronger pay-for-performance sensitivity. CEO wealth becomes more closely tied to stock price performance, and the difference is not trivial: It corresponds to tens of thousands of dollars in additional pay sensitivity for a board that has refreshed more than a typical peer. At the same time, refreshment is positively related to pay-for-risk sensitivity. This balance matters. Compensation should reward performance, but it should also give managers incentives to take appropriate risks rather than avoid valuable long-term projects.

The blog also shares questions that investors should ask and says companies should make their refreshment disclosure more visible. I’d also add that investors may be interested in compensation committee refreshment specifically, so it may be valuable to highlight that.

– Meredith Ervine 

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.

– Liz Dunshee

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.

This excerpt from the Glass Lewis “peer group” page explains how the information is used:

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.

– Liz Dunshee

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:

– Powerfleet’s Stockholder Engagement Disclosure

– Casey’s General Stores Executive Pay Summary

– ePlus’s Clawback Disclosure

– Monro’s Realized Pay Comparison Disclosure

– Universal Corp.’s Compensation Discussion and Analysis

– J.M. Smucker’s Defined Benefit Plan Disclosure

– Allegro MicroSystems’ Compensation Discussion and Analysis

– Brown-Forman’s Special Recognition Award Disclosure

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.

– Liz Dunshee

Here’s an interesting note from the latest Semler Brossy newsletter:

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?

2. Is information from a broader group useful?

Members can visit our “Peer Groups” Practice Area for more info on creating and using peer groups.

– Liz Dunshee