The Advisors' Blog

Here’s the latest 154-page guide for compensation committees from Wachtell. This year’s guide notes that we’re in a state of flux. Here’s an excerpt from the intro:

As we enter the 2026 proxy season, compensation committee members are participating more actively than ever in the process of disclosing executive compensation and soliciting shareholder feedback. Shareholders and proxy advisory firms have increasingly signaled that compensation committees should play a role in seeking input from shareholders on a company’s executive pay philosophy, and committee members are expending increased time and energy to engage with shareholders on these issues.

The preparation of the annual proxy statement, which is often a tool to highlight how executive pay has been tailored in response to shareholder feedback, has evolved into a purpose-driven, intensive collaboration among management, the compensation committee, the compensation consultant, and external legal counsel to produce a document that serves as an executive compensation mission statement, state-of-the-union update on the performance of the business, and catalogue of shareholder engagement efforts, while at the same time complying with technical disclosure rules, the scope and breadth of which are constantly expanding.

Against this backdrop, the state of executive compensation disclosure regulation appears to be in flux, as U.S. Securities and Exchange (“SEC”) Commissioner Paul S. Atkins shared his vision on February 17, 2026 for enacting “SEC disclosure reform” that would prescribe the “minimum effective dose of regulation,” and it remains to be seen how potential changes in the disclosure requirements may impact the role of the compensation committee.

Other developments addressed by this year’s guide include:

– The state of non-compete bans and enforcement actions aimed at anticompetitive activity

– Notable Delaware decisions on compensation

– Whistleblower compliance reviews

– Updates to proxy advisor policies

As usual, the guide includes a sample “Compensation [and Management Development] Committee Charter” as an exhibit, although it notes, “It would be a mistake for any company to simply copy published models. The creation of charters requires experience and careful thought . . . we recommend that each company tailor its compensation committee charter and written procedures to those that are necessary and practical for the particular company.”

– Liz Dunshee