Proposed Rule2022-02024
Reopening of Comment Period for Pay Versus Performance
Primary source
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Published
February 2, 2022
Effective
May 7, 2015
Issuing agencies
Securities and Exchange Commission
Abstract
The Securities and Exchange Commission ("Commission") is reopening the comment period for its proposal to implement Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act"). The proposed rule would amend the current executive compensation disclosure rule to require a description of how executive compensation actually paid by a registrant related to the financial performance of that company ("proposed rules"). The proposed rules were first set forth in a release published in the Federal Register on May 7, 2015 (Release No. 34-74835) ("Proposing Release"), and the related comment period ended on July 6, 2015. The reopening of this comment period is intended to allow interested persons further opportunity to analyze and comment upon the proposed pules in light of developments since the publication of the Proposing Release and our further consideration of the Section 953(a) mandate, including by responding to the additional requests for comment included in this release.
Full Text
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<title>Federal Register, Volume 87 Issue 22 (Wednesday, February 2, 2022)</title>
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[Federal Register Volume 87, Number 22 (Wednesday, February 2, 2022)]
[Proposed Rules]
[Pages 5751-5759]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-02024]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 229, 240, and 249
[Release No. 34-94074; File No. S7-07-15]
RIN 3235-AL00
Reopening of Comment Period for Pay Versus Performance
AGENCY: Securities and Exchange Commission.
ACTION: Proposed rule; reopening of comment period.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
reopening the comment period for its proposal to implement Section
953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010 (``Dodd-Frank Act''). The proposed rule would amend the current
executive compensation disclosure rule to require a description of how
executive compensation actually paid by a registrant related to the
financial performance of that company (``proposed rules''). The
proposed rules were first set forth in a release published in the
Federal Register on May 7, 2015 (Release No. 34-74835) (``Proposing
Release''), and the related comment period ended on July 6, 2015. The
reopening of this comment period is intended to allow interested
persons further opportunity to analyze and comment upon the proposed
pules in light of developments since the publication of the Proposing
Release and our further consideration of the Section 953(a) mandate,
including by responding to the additional requests for comment included
in this release.
DATES: The comment period for the proposed rule published May 7, 2015,
at 80 FR 26329, is reopened. Comments should be received on or before
March 4, 2022.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/submitcomments.htm">https://www.sec.gov/rules/submitcomments.htm</a>).
Paper Comments
<bullet> Send paper comments to Vanessa A. Countryman, Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number S7-07-15. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
website (<a href="http://www.sec.gov/rules/proposed.shtml">http://www.sec.gov/rules/proposed.shtml</a>). Comments also are
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549-1090 on official
business days between the hours of 10 a.m. and 3 p.m. Operating
conditions may limit access to the Commission's public reference room.
All comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly.
Studies, memoranda, or other substantive items may be added by the
Commission or staff to the comment file during this rulemaking. A
notification of the inclusion in the comment file of any such materials
will be made available on our website. To ensure direct electronic
receipt of such notifications, sign up through the ``Stay Connected''
option at <a href="http://www.sec.gov">www.sec.gov</a> to receive notifications by email.
FOR FURTHER INFORMATION CONTACT: John Byrne, Special Counsel, in the
Office of Small Business Policy, at (202) 551-3460, Division of
Corporation Finance, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549.
SUPPLEMENTARY INFORMATION:
I. Background
Section 953(a) of the Dodd-Frank Act added Section 14(i) to the
Securities Exchange Act of 1934 \1\ (``Exchange Act''). Section 14(i)
requires that the Commission adopt rules requiring issuers to disclose
in any proxy or consent solicitation material for an annual meeting of
shareholders a clear description of any compensation required to be
disclosed under 17 CFR 229.402 (``Item 402 of Regulation S-K''),
including information that shows the relationship between executive
compensation actually paid and the financial performance of the issuer,
taking into account any change in the value of the shares of stock and
dividends of the issuer and any distributions. Section 14(i) further
provides that the disclosure may include a graphic representation of
the information required to be disclosed.
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\1\ 15 U.S.C. 78a et seq.
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As described more fully in the Proposing Release,\2\ the proposed
rules would add new 17 CFR 229.402(v) (``Item 402(v) of Regulation S-
K''), which would require registrants to describe how the executive
compensation actually paid by the registrant related to the financial
performance of the registrant over the time horizon of the disclosure.
The proposed rules would use cumulative total shareholder return
(``TSR''), as defined in 17 CFR 229.201(e) (``Item 201(e) of Regulation
S-K''),\3\ as the measure of financial performance. Under the proposed
rules, the following tabular disclosures would be required, with the
asterisked items indicating portions of the proposed rules from which
smaller reporting companies (``SRCs'') \4\ would be exempt: \5\
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\2\ See Pay Versus Performance, Release No. 34-74835 (Apr. 29,
2015) [80 FR 26329 (May 7, 2015)].
\3\ Item 201(e) of Regulation S-K sets forth the specific
disclosure requirements for the issuer's stock performance graph,
which is required to be included in the annual report to security
holders required by 17 CFR 240.14a-3 and 240.14c-3. The Item
provides that cumulative total shareholder return is calculated by
``dividing the sum of the cumulative amount of dividends for the
measurement period, assuming dividend reinvestment, and the
difference between the registrant's share price at the end and the
beginning of the measurement period; by the share price at the
beginning of the measurement period.''
\4\ A ``smaller reporting company'' means an issuer that is not
an investment company, an asset-backed issuer, or a majority-owned
subsidiary of a parent that is not a smaller reporting company and
that: (1) Had a public float of less than $250 million (as of the
last business day of the issuer's most recently completed second
fiscal quarter); or (2) had annual revenues of less than $100
million (as of the most recently completed fiscal year for which
audited financial statements are available) and either: (i) No
public float (as of the last business day of the issuer's most
recently completed second fiscal quarter); or (ii) a public float of
less than $700 million (as of the last business day of the issuer's
most recently completed second fiscal quarter). 17 CFR 240.12b-2.
Business development companies, which are a type of closed-end
investment company that is not registered under the Investment
Company Act, do not fall within the SRC definition.
\5\ The Commission amended the SRC definition effective
September 2018. See Amendments to the Smaller Reporting Company
Definition, Release No. 33-10513 (June 28, 2018) [83 FR 31992 (July
10, 2018)]. Based on staff analysis of filings in 2019,
approximately 45 percent of registrants subject to the Proposed
Rules would be SRCs and thus would be exempt from the asterisked
disclosure, compared to approximately 40 percent at the time of
publication of the Proposed Rules. Estimates based on 2020 filings
would reflect a more modest change in the proportion of SRCs, but
may undercount SRCs due to a greater number of registrants,
particularly small ones, being late to file than in prior years.
[[Page 5752]]
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Average
Summary summary Average Peer group
compensation Compensation compensation compensation Total total
Year table total actually paid table total actually paid shareholder shareholder
for PEO to PEO for non-PEO to non-PEO NEO return return *
NEO
(a) (b) (c) (d) (e) (f) (g)
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Y1.............. .............. .............. .............. .............. .............. ..............
Y2.............. .............. .............. .............. .............. .............. ..............
Y3.............. .............. .............. .............. .............. .............. ..............
Y4 *............ .............. .............. .............. .............. .............. ..............
Y5 *............ .............. .............. .............. .............. .............. ..............
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Specifically, the proposed rules would:
<bullet> Apply to a registrant's ``named executive officers''
(``NEOs'') as defined in 17 CFR 229.402(a)(3); \6\
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\6\ 17 CFR 229.402(a)(3) defines the NEOs for whom Item 402 of
Regulation S-K executive compensation is required as (1) all
individuals serving as the registrant's principal executive officer
(``PEO'') or acting in a similar capacity during the last completed
fiscal year, regardless of compensation level, (2) all individuals
serving as the registrant's principal financial officer (``PFO'') or
acting in a similar capacity during the last completed fiscal year,
regardless of compensation level, (3) the registrant's three most
highly compensated executive officers other than the PEO and PFO who
were serving as executive officers at the end of the last completed
fiscal year, and (4) up to two additional individuals for whom Item
402 of Regulation S-K disclosure would have been provided but for
the fact that the individual was not serving as an executive officer
of the registrant at the end of the last completed fiscal year. For
SRCs, the Proposed Rules would apply to the scaled number of NEOs
included in 17 CFR 229.402(m)(2).
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<bullet> Address the Section 953(a) of the Dodd-Frank Act required
measure of ``executive compensation actually paid'' (emphasis added) by
using, as a starting point, the total compensation that is already
required to be disclosed in the Summary Compensation Table.\7\ For the
PEO, the total PEO compensation from the Summary Compensation Table
would be disclosed in column (b) of the new table; and, for NEOs, the
average of their total compensation from the Summary Compensation Table
would be disclosed in column (d) of the new table. The following two
adjustments to the disclosure in the Summary Compensation Table would
be made to determine the executive compensation amounts ``actually
paid'' (columns (c) and (e) of the new table):
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\7\ 17 CFR 229.402(c). SRCs would provide the scaled Summary
Compensation Table disclosure in 17 CFR 229.402(n).
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1. Exclude changes in actuarial present value of benefits under
defined benefit and actuarial pension plans that are not attributable
to the applicable year of service; \8\ and
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\8\ As proposed, SRCs would not be required to disclose and
exclude amounts related to pensions for purposes of disclosing
executive compensation actually paid because they are subject to
scaled compensation disclosure that does not include pension plans.
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2. Include the value of equity awards at vesting rather than when
granted.
<bullet> Require the executive compensation amounts actually paid
to be presented separately for the PEO, and as an average for the
remaining NEOs;
<bullet> Require a registrant's TSR, as defined in Item 201(e) of
Regulation S-K, and the TSR of the registrant's peer group as measures
of financial performance (columns (f) and (g) of the new table);
<bullet> Require a registrant to use the information in the above
table to provide a clear description of (1) the relationship between
executive compensation actually paid to the registrant's NEOs and the
cumulative TSR of the registrant, and (2) the relationship between the
registrant's TSR and the TSR of a peer group chosen by the registrant,
in each case over the registrant's five most recently completed fiscal
years;
<bullet> For SRCs, require the disclosure of the relationship
between executive compensation actually paid and TSR over the
registrant's three most recently completed fiscal years, without
requiring these registrants to provide disclosure of peer group TSR;
and
<bullet> Require that the disclosure be provided in a structured
data language using the Inline eXtensible Business Reporting Language
(``Inline XBRL'').\9\
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\9\ In 2015, the Commission proposed requiring the structured,
machine-readable eXtensible Business Reporting Language (``XBRL'')
for the tagging requirements in the Proposed Rule. The Commission
subsequently adopted rules replacing XBRL tagging requirements for
registrant financial statements with Inline XBRL tagging
requirements. As a result of those changes, we are considering using
Inline XBRL, rather than XBRL, for the proposed tagging
requirements. See infra footnote 25.
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Registrants would also be permitted to provide supplemental
measures of compensation and/or financial performance, or other
supplemental disclosures, so long as any additional disclosure is
clearly identified, not misleading and not presented with greater
prominence than the required disclosure.
The Commission proposed applying the rule to all reporting
companies except foreign private issuers, registered investment
companies, and Emerging Growth Companies (``EGCs'').\10\
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\10\ ``Emerging growth company'' means an issuer that had total
annual gross revenues of less than $1.07 billion during its most
recently completed fiscal year. An issuer that is an emerging growth
company as of the first day of that fiscal year shall continue to be
deemed an emerging growth company until the earliest of: (i) The
last day of the fiscal year of the issuer during which it had total
annual gross revenues of $1.07 billion or more; (ii) the last day of
the fiscal year of the issuer following the fifth anniversary of the
date of the first sale of common equity securities of the issuer
pursuant to an effective registration statement under the Securities
Act of 1933 [15 U.S.C. 77a et seq.]; (iii) the date on which such
issuer has, during the previous three year period, issued more than
$1 billion in non-convertible debt; or (iv) the date on which such
issuer is deemed to be a large accelerated filer. 17 CFR 240.12b-2.
Section 102(a)(2) of the Jumpstart Our Business Startups Act amended
Exchange Act Section 14(i) to exclude registrants that are EGCs from
the pay-versus-performance disclosure requirements. Public Law 112-
106, 126 Stat. 306 (2012). In accordance with this provision, the
Commission did not propose to require EGCs to provide pay-versus-
performance disclosure. As proposed, business development companies
would be treated in the same manner as issuers other than registered
investment companies and, therefore, would be subject to the
disclosure requirement of proposed new Item 402(v) of Regulation S-
K.
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II. Reopening of Comment Period
Section 953(a) of the Dodd-Frank Act was enacted in 2010 and the
proposed rules were published in 2015. Since the proposed rules were
published, executive compensation practices related to company
performance have continued to develop and evolve,\11\ to
[[Page 5753]]
the point that we believe interested persons should be given a further
opportunity to analyze and comment upon the proposed rules. In
addition, as described below, we are considering whether additional
requirements would better implement the Section 953(a) mandate by
providing investors with additional decision-relevant data.
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\11\ For example, there has been a continued increase in the
prevalence of performance-contingent share plans and a decrease in
the use of stock options to compensate CEOs among S&P 500 and
Russell 3000 companies. See, e.g., Pay Governance (Jan. 2021), S&P
500 CEO Compensation Increase Trends, available at
<a href="http://www.paygovernance.com/viewpoints/s-p-500-ceo-compensation-increase-trends-4">www.paygovernance.com/viewpoints/s-p-500-ceo-compensation-increase-trends-4</a>; and Gallagher (February 2021), CEO and Executive
Compensation Practices Report: 2020 Edition, available at
www.<a href="http://ajg.com/us/news-and-insights/2021/feb/ceo-executive-compensation-practices-report-2020/">ajg.com/us/news-and-insights/2021/feb/ceo-executive-compensation-practices-report-2020/</a>. See also, Meridian Compensation
Partners, LLC, 2020 Trends and Developments in Executive
Compensation (April 30, 2020), available at <a href="https://www.meridiancp.com/wp-content/uploads/Meridian-2020-Trends-and-Developments-Survey-Final.pdf">https://www.meridiancp.com/wp-content/uploads/Meridian-2020-Trends-and-Developments-Survey-Final.pdf</a> (summarizing responses to a survey
from 108 companies, and discussing, among other developments, a
decline in the use of TSR as the sole performance metric in long-
term incentive plans, from 47% in 2016 to 30% in 2020, and the
recent use by some companies of TSR as a modifier to results
initially determined by one or more other financial metrics). Also,
the COVID-19 pandemic has affected both how and the extent to which
companies recently have tied executive compensation to company
performance. See, e.g., A. Batish, et al., Sharing the Pain: How Did
Boards Adjust CEO Pay in Response to COVID-19?, Rock Center for
Corporate Governance at Stanford University Closer Look Series:
Topics, Issues and Controversies in Corporate Governance No. CGRP-86
(Sep. 1, 2020), available at <a href="https://ssrn.com/abstract=3682766">https://ssrn.com/abstract=3682766</a>
(analyzing compensation disclosure from all Russell 3000 companies
between January 1 and June 30, 2020, and finding ``502 companies (17
percent) made adjustments to CEO salary, bonus, or long-term
incentive programs (LTIPs), or director fees during this measurement
period,'' with 92 companies making adjustments to annual bonus
programs and 33 companies making changes to their long-term
incentive programs).
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Section 953(a) of the Dodd-Frank Act does not specify how to
measure an issuer's ``financial performance.'' However, the statutory
language requires that ``financial performance . . . [take] into
account any change in the value of the shares of stock and dividends of
the issuer and any distributions.'' Consistent with this language, the
Commission proposed requiring TSR (as defined in Item 201(e) of
Regulation S-K) as the measure of ``financial performance'' of the
registrant. The Commission also proposed TSR because, among other
reasons, it is:
<bullet> Consistently calculated and should increase comparability
across registrants;
<bullet> Objectively determinable and not open to subjective
determinations of performance; and
<bullet> A measure for which disclosure is already required and
with which shareholders are familiar, so its use was intended to
mitigate the burdens both to registrants to provide the disclosure and
to investors to analyze the new disclosure.
We are considering requiring registrants to disclose, in addition
to their TSR and the TSR of their peer group, certain other measures of
performance, which could provide additional clarity to investors as to
the relation between executive compensation and financial performance.
Specifically, we are considering requiring disclosure in tabular form
of the following three additional measures: Pre-tax net income, net
income, and a measure specific to a particular registrant, chosen by
said registrant (the ``Company-Selected Measure''). As noted in the
Proposing Release, registrants would be required to provide a clear
description of the relationship among the measures provided in the
tabular form (including these three additional measures we are
considering requiring), but would be allowed to choose the format used
to present the relationship, such as a graph or narrative description.
The first two additional measures of financial performance under
consideration--pre-tax net income and net income--are already provided
for under U.S. Generally Accepted Accounting Principles (``U.S. GAAP'')
\12\ and, accordingly, are familiar to investors and registrants. We
are considering whether to require registrants to disclose these
measures in two additional columns to the table described in the
Proposing Release and shown above. Because these measures reflect a
registrant's overall profits and are net of costs and expenses, we
believe they are additional important measures of company financial
performance that may be relevant to investors in evaluating executive
compensation. We believe using a company's pre-tax net income and net
income could complement the market-based performance measure required
in the Proposing Release by also providing accounting-based measures of
financial performance. To the extent that these measures would
otherwise be considered by investors when evaluating the alignment of
pay with performance, including pre-tax net income and net income as
additional measures of performance in the proposed table may lower the
burden of analysis for those investors by presenting this existing
information together in a way that could make it easier to understand
how pay relates to performance.
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\12\ Net income is required to be disclosed in financial
statements. While some registrants are not explicitly required to
present pre-tax net income in their financial statements, U.S. GAAP
includes presentation and disclosure requirements that result in
information sufficient to calculate pre-tax net income, and these
registrants often do present pre-tax net income.
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We are also considering whether to require registrants to disclose,
as an additional column to the above table, a third new measure--the
Company-Selected Measure--that in the registrant's assessment
represents the most important performance measure (that is not already
included in the table) \13\ used by the registrant to link compensation
actually paid during the fiscal year to company performance, over the
time horizon of the disclosure. We believe that requiring registrants
to select their own measure rather than mandating a further specific
measure may elicit additional useful disclosure while reducing the
risk, identified by commenters on the Proposing Release,\14\ of
misrepresenting or providing an incomplete picture of how pay relates
to performance given the differences across companies in terms of
performance measures that companies or investors care about and the
questions about whether a ``one size fits all'' benchmark is
appropriate for all companies.
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\13\ If the registrant's most important performance measure were
already included in the table, the registrant would disclose its
next-most important measure as its Company-Selected Measure. For
example, if the registrant's most important measure were TSR, its
second most important measure were pre-tax net income, and its third
most important measure were EBITDA, the registrant would include
EBITDA as its Company-Selected Measure. If a registrant did not use
any measures other than those already included in the table, it
would indicate that fact in its disclosure.
\14\ See, e.g., letters from Business Roundtable dated July 6,
2015, Celanese Corp. dated June 12, 2015, Steven Hall & Partners
dated July 6, 2015, Hyster-Yale Materials Handling, Inc. dated June
10, 2015, PNC Financial Services Group, Inc. dated July 6, 2015, and
Simpson Thacher & Bartlett LLP dated July 6, 2015 (each opposing the
use of TSR as the sole measure of financial performance and
suggesting providing registrants the ability to choose their own
performance measure). Comment letters received in response to the
Proposing Release are available at <a href="https://www.sec.gov/comments/s7-07-15/s70715.shtml">https://www.sec.gov/comments/s7-07-15/s70715.shtml</a>. In addition, in a review of the CD&As of around
20 of the largest Fortune 500 companies, the staff noted that, among
these companies, there were over 100 unique performance measures,
almost all of which were company-specific or adjusted measures.
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For reference, the three additional measures we are considering
requiring would be part of the table in the proposed rules as follows:
\15\
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\15\ The title of column (j) of the table, ``Company-Selected
Measure,'' would be replaced with the name of the registrant's most
important measure, and that column would include the numerically
quantifiable performance of the issuer under such measure for each
covered fiscal year. For example, if the Company Selected Measure
for the most recent fiscal year was EBITDA, the company would
disclose its quantified EBITDA performance in each covered fiscal
year. The asterisked items indicate disclosures we are considering
not requiring SRCs to provide. See below for a discussion of our
considerations with respect to SRC disclosure requirements.
[[Page 5754]]
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Average
Summary summary Average Peer group
compensation Compensation compensation compensation Total total Pre-tax net Net income [Company-
Year table total actually table total actually shareholder shareholder income (loss) selected
for PEO paid to PEO for non-PEO paid to non- return return * (loss) measure] *
NEOs PEO NEOs
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
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Y1............................. ............ ............ ............ ............ ........... ........... ........... ........... ...........
Y2............................. ............ ............ ............ ............ ........... ........... ........... ........... ...........
Y3............................. ............ ............ ............ ............ ........... ........... ........... ........... ...........
Y4 *........................... ............ ............ ............ ............ ........... ........... ........... ........... ...........
Y5 *........................... ............ ............ ............ ............ ........... ........... ........... ........... ...........
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In addition to potentially including the Company-Selected Measure
in the table described in the Proposing Release, we are considering
whether to separately require registrants to provide a list of their
five most important performance measures used by the registrant to link
compensation actually paid during the fiscal year to company
performance, over the time horizon of the disclosure, in order of
importance. If the registrant considers fewer than five performance
measures when it links compensation actually paid during the fiscal
year to company performance, the registrant would be required to
disclose only the number of measures it actually considers.\16\ We are
considering whether to require this list to be in a tabular format. We
note that some commenters to the Proposing Release suggested revising
the Proposed Rules to require, in addition to TSR, the quantitative
metrics or key performance targets companies actually use to set
executive pay.\17\ Currently, the Compensation Discussion and Analysis
(``CD&A'') requirements in Item 402 of Regulation S-K include requiring
a registrant to explain all material elements of the compensation paid
to its NEOs.\18\ The item further specifies that examples of this
material information may include how executive compensation relates to
company performance such as:
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\16\ Throughout this release, we reference the ``five'' most
important performance measures. If the registrant considers fewer
than five performance measures, all references to the ``five'' most
important performance measures should be read as the number of
performance measures the registrant considers, if less than five.
\17\ See, e.g., letters from the American Federation of Labor
and Congress of Industrial Organizations dated June 30, 2015,
Council of Institutional Investors dated June 25, 2015, and Public
Citizen dated July 6, 2015.
\18\ See 17 CFR 229.402(b)(1).
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<bullet> What specific items of corporate performance are taken
into account in setting compensation policies and making compensation
decisions;
<bullet> How specific forms of compensation are structured and
implemented to reflect these items of corporate performance; and
<bullet> How specific forms of compensation are structured and
implemented to reflect the NEOs' individual performance and/or
individual contribution to these items of the company's
performance.\19\
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\19\ These specific examples are set forth in 17 CFR
229.402(b)(2)(v) through (vii).
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Generally, discussion of these topics in the CD&A tends to be
prospective in nature and focused on the design of the registrant's
compensation program. However, there is no existing rule that
specifically mandates disclosure of the performance measures that
actually determined the level of recent NEO compensation actually paid.
Tabular disclosure of a list of the five most important performance
measures that drove compensation actually paid may be useful to
investors in addition to the more detailed disclosure related to the
consideration of the registrant's corporate performance and individual
performance in the design of NEO compensation required in the CD&A.
This tabular disclosure may enable investors to more easily assess
which performance metrics actually have the most impact on compensation
actually paid and make their own judgments as to whether compensation
appropriately incentivizes management. The disclosure of the five most
important performance measures that drove compensation actually paid
may also provide investors with context that could be useful in
interpreting the remainder of the pay versus performance disclosure.
For reference, we are considering requiring the five performance
measures, as applicable, to be disclosed in the following tabular
format:
Five Most Important Company Performance Measures for Determining NEO
Compensation
------------------------------------------------------------------------
------------------------------------------------------------------------
1. Measure 1.
2. Measure 2.
3. Measure 3.
4. Measure 4.
5. Measure 5.
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In our consideration of such a tabular requirement, we note that
registrants would be able to cross-reference to existing disclosures
elsewhere in the disclosure document that describe the various
processes and calculations that go into determining NEO compensation as
it relates to these performance measures, if they elected to do so.
We believe that including a tabular list of those performance
measures that drove recent compensation actually paid may help address
concerns that using only TSR may mislead investors or provide an
incomplete picture of performance. In addition, as referenced above
with respect to the Company-Selected Measure, we believe the inclusion
of a registrant's five most important performance measures may better
reflect the differences across companies.
We believe that the proposed rules, along with the additional
disclosures we are considering, as detailed above, may facilitate the
analysis of registrants' executive compensation actually paid in
relation to company performance. In particular, as discussed above,
each of the additional disclosures under consideration may broaden the
picture of financial performance presented in the disclosure. This
additional detail and context could enhance the usefulness of the
disclosure by certain registrants or for certain investors. We
recognize that the benefits of such disclosure would depend on the
degree to which the elements of the disclosure align with the factors
that investors seek to understand when considering pay in relation to
performance.
As is the case with the proposed rules, we recognize that it is
possible that shareholders may bear information processing costs
resulting from any additional elements required to be included in the
disclosure, if the new requirements increase the length and complexity
of existing disclosures without significantly adding to the ease of
interpretation. The additional elements under consideration could also
reduce the benefits of the disclosure required by the Proposed Rules if
they complicate or obscure the elements of
[[Page 5755]]
the proposed disclosure that would be most helpful to investors.
We also acknowledge that each additional requirement could increase
reporting costs for registrants. However, we believe the costs to
registrants of providing the disclosures we are considering in addition
to those described in the proposed rules likely would be relatively
low. Specifically, pre-tax net income and net income are generally
presented in the financial statements of registrants, and, therefore,
we believe there should be minimal additional costs to include those
measures in the proposed new table. That said, prescribing additional
measures whose relation to compensation must be clearly described
increases the cost of producing the disclosure as well as the risk that
some of these measures may not be as relevant for some issuers and that
these issuers may therefore feel the need to include clarifying
disclosures. The Company-Selected Measure and the other four most
important performance measures are already considered by registrants in
making executive compensation determinations and may already be
discussed, in a different form, in the CD&A. While identifying and
ranking the Company-Selected Measure and the other four measures may
require some incremental consideration and additional computations, we
expect that their disclosure should result in limited additional costs,
though registrants with more complex compensation packages involving
more performance measures may bear relatively greater costs.
As is the case with the proposed rules, we expect the effect of the
additional disclosures we are considering to have limited other effects
on efficiency, competition and capital formation. If the proposed
disclosures were either to facilitate or complicate the task of
understanding executive pay policies, they may marginally increase or
decrease the informational efficiency of markets, respectively. The
proposed amendments and the additional disclosures we are considering
could also lead to indirect effects if the disclosures lead to changes
in compensation packages. As discussed in the Proposing Release, we
believe such changes are unlikely due to the high level of existing
attention to pay practices and the limited new information that would
be disclosed. Finally, the disclosure of the ranking of the list of the
most important performance measures could negatively affect competition
if this information is sensitive and has competitive value.
To address concerns about burdens on smaller registrants, we are
considering whether and how the proposed rules and the potential
disclosure of additional measures we are considering would apply to
SRCs. Under existing rules, SRCs are subject to abbreviated executive
compensation disclosure requirements.\20\ For example, SRCs are not
required to provide a CD&A but are instead permitted to produce a more
limited, narrative disclosure. To minimize costs for SRCs and
consistent with the treatment of SRCs in many other areas, the
Commission proposed permitting SRCs to provide scaled disclosure under
the proposed rules. For example, and as indicated by the asterisked
portions of the table described in the Proposing Release and shown
above in Section I of this release, under the Proposed Rules, SRCs
would not be required to provide the peer group TSR, as they are exempt
from providing this disclosure under existing rules.\21\
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\20\ See 17 CFR 229.402(l) through (r).
\21\ See Instructions to Item 201(e) of Regulation S-K.
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With respect to the potential disclosure of additional measures,
pre-tax net income and net income are already provided for under U.S.
GAAP, and therefore we are considering requiring SRCs to disclose such
measures. In contrast, the current abbreviated executive compensation
disclosure requirements applicable to SRCs do not require them to
provide a CD&A, and thus do not specifically call for disclosure about
how executive compensation relates to company performance. Accordingly,
and unlike other reporting companies, requiring SRCs to disclose a
Company-Selected Measure and a list of their five most important
performance measures would be a new disclosure obligation that SRCs
would not be able to satisfy by drawing upon or cross-referencing to
existing disclosures. We therefore are considering not requiring SRCs
to disclose a Company-Selected Measure and a list of their five most
important performance measures.
In light of developments in executive compensation practices
related to company performance since the publication of the Proposing
Release, and our further consideration of how best to implement the
mandate of Section 953(a) of the Dodd-Frank Act, we are reopening the
comment period for the proposed rules until March 4, 2022 to provide
the public with an additional opportunity to analyze and comment on the
proposed rules as well as the additional measures we are considering.
Commenters may submit, and the Commission will consider, comments on
any aspect of the proposed rules or the additional measures we are
considering. All comments received to date on the proposed rules will
be considered and need not be resubmitted. Comments are particularly
helpful if accompanied by quantified estimates or other detailed
analysis and supporting data about the issues addressed in those
comments. In addition to the requests for comment included in the
Proposing Release, the Commission specifically seeks comments on the
following:
Request for Comment
1. Should disclosure of additional financial performance measures
beyond TSR be required? Specifically, would investors find it useful to
have pre-tax net income and net income presented in tabular format
alongside the other metrics that would be required by the Proposing
Release? Would these two additional metrics help investors to
appropriately evaluate the relationship between executive compensation
actually paid and the financial performance of the registrant? Would
the inclusion of these measures alleviate concerns previously raised by
commenters on the proposed rules about including only TSR and peer
group TSR in this disclosure? Would their inclusion complicate the
disclosure such that its usefulness could be reduced? Should we also
require that these measures, if any, be discussed in the required
description (which may be, e.g., narrative or graphical) that
accompanies the tabular disclosure? Instead of requiring additional
financial performance measures, should we instead include pre-tax net
income and net income as examples of additional measures registrants
could elect to disclose if they believed such disclosure would be
beneficial for them? What would the benefits or drawbacks be of that
approach?
2. Are there other measures of company performance that we should
consider mandating in addition to or in lieu of pre-tax net income and/
or net income? If so, which additional or alternative measures should
we require and why? How would these additional or alternative measures
be useful for investors in measuring company performance? Should we
also require that these measures, if any, be discussed in the required
description (which may be, e.g., narrative or graphical) that
accompanies the tabular disclosure?
3. How should we define the Company-Selected Measure, if we were to
require its disclosure? We are considering defining the Company-
Selected Measure as the measure that in
[[Page 5756]]
the registrant's assessment represents the most important performance
measure (that is not already included in the table) used by the
registrant to link compensation actually paid during the fiscal year to
company performance. Would such a definition provide sufficient clarity
to a registrant as to what to disclose? What computations or
considerations would be required in determining the Company-Selected
Measure and what would be the associated costs for registrants? Should
we require registrants to disclose the methodology used to calculate
the Company-Selected Measure? Should that consideration depend on
whether the measure is already disclosed in the Company's financial
statements?
4. Should we require the Company-Selected Measure to be the most
important measure used by the registrant in a performance or market
condition in the context of an incentive plan as defined in 17 CFR
229.402(a)(6)(iii)? \22\ Would including such a measure in the tabular
disclosure allow investors to better evaluate the extent to which the
total compensation reported as actually paid reflects the performance
the company explicitly chose to incentivize, and if so would such an
evaluation be useful to investors? Should the Company-Selected Measure
instead be the performance measure that is deemed most important by the
registrant whether or not it is used in a performance or market
condition in the context of an incentive plan (i.e., including the
effect of stock price movements on equity incentive plan compensation,
even in the absence of a market condition; or measures that affect non-
incentive plan compensation, such as the retrospective use of
performance measures in determining compensation reportable in the
bonus column of the Summary Compensation Table \23\)?
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\22\ See also Release No. 33-8732A, Executive Compensation and
Related Person Disclosure (Aug. 29, 2006) [71 FR 53158] (``2006
Adopting Release'') at n. 167 (discussing the use of performance
conditions and market conditions in equity incentive plans).
\23\ See 2006 Adopting Release at Section II.C.1.f for a
discussion of the distinction between compensation reportable as
bonuses and compensation reportable as non-equity incentive plan
compensation.
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5. We recognize that there could be varying methods of evaluating
which measures are the most important. Should we define ``most
important'' for the purpose of the selection of the Company-Selected
Measure, as well as for the ranking of any other measures, if required?
If so, how? For example, should the ``most important'' measure be the
one on which the highest aggregate dollars of compensation actually
paid were contingent? Or should ``importance'' be based on the dollar
impact of the measure's variation from its initial or expected level on
compensation actually paid, whether positive or negative? Instead,
should ``importance'' be weighed based on what considerations drove the
registrant's executive compensation decisions rather than its executive
compensation outcomes? Alternatively, should we not specify a
particular method to use to evaluate the relative importance of a
performance measure in driving compensation actually paid or define
``most important,'' and instead allow registrants to determine what
they consider to be ``important'' for this purpose and select the
Company-Selected Measure accordingly, with disclosure explaining how
they made their choice? Instead of requiring that the ``most
important'' measure be the measure generally used by the registrant to
link compensation actually paid to company performance, should we
require that the ``most important'' measure be the measure specifically
used by the registrant to link only PEO compensation actually paid to
company performance? What would the benefits and drawbacks be of
narrowing the definition of ``most important'' to only PEO
compensation?
6. What disclosure should be required if different measures are
important in different years or if different measures determine
compensation actually paid for the different NEOs? Would aggregating
the NEOs for purposes of determining the most important measure be
difficult, given that some NEOs may have their compensation linked to
industry- or segment-specific performance measures, which are not used
for other NEOs? If so, are there ways to mitigate these differences to
provide useful disclosures for investors? What if different measures
contribute equally to determining compensation actually paid? If the
measure deemed most important is already included among the performance
measures in the Proposed Rules or among the additional measures we are
considering in this release, should the company be permitted to
designate that measure as the Company-Selected Measure, or should the
company be required to disclose an additional significant measure, such
as the next-most important measure not already disclosed, as the
Company-Selected Measure? What would the impact of either approach be
on the usefulness of disclosure of the Company-Selected Measure? If we
permit a registrant to designate TSR, peer group TSR, pre-tax net
income, or net income as the Company-Selected Measure, or if a
registrant did not use any measures other than those already included
in the table, how should it indicate that fact in its disclosure? For
example, should the registrant be required to include in the Company-
Selected Measure column duplicate disclosure of the measure already
included in the table, or should the registrant be required to include
a note to the measure already included in the table indicating that
measure is also the registrant's Company-Selected Measure?
7. Would mandated disclosure of the Company-Selected Measure be
useful to investors when placed alongside the metrics that would be
required by the Proposing Release? How would these benefits, if any,
compare to those of any supplemental financial performance measures
that would voluntarily be disclosed by registrants in the absence of
such a mandate? Would there be challenges to registrants to presenting
information about the Company-Selected Measure in tabular form? If so,
how could we elicit comparable disclosure while also allowing
registrants flexibility in presenting this information to accommodate
their particular facts and circumstances? Is there another format we
should consider for the Company-Selected Measure? Should we
specifically limit any Company-Selected Measure only to those measures
that relate to the financial performance of the registrant? Or should
we allow the Company-Selected measure to be any measure that could be
disclosed under the existing CD&A requirements, including financial
performance measures; environmental, social and governance related
measures; or any other measures used by the registrant to link
compensation actually paid during the fiscal year to company
performance?
8. We are considering requiring the one Company-Selected Measure
that is the most important measure over the time horizon of the
disclosure to be identified in the table, and issuers would provide
information about that measure, including the numerically quantifiable
performance of the issuer with respect to that measure, for all of the
years in the table. Would investors find such a presentation useful?
Would there be challenges to registrants to presenting this information
for all years? Should we instead allow companies to change their
Company-Selected Measure from year to year, such that they would
disclose in the table a potentially different Company-Selected
[[Page 5757]]
Measure for each respective year? Would doing so have any impact on
investors' ability to understand how pay relates to performance and
compare across different years? If we do require a registrant to
disclose one Company-Selected Measure to be identified in the table,
and that registrant elects to change what that measure is in
consecutive years, should we require that registrant to separately
disclose in additional columns, or narratively, the Company-Selected
Measures used in the table in prior years? How often do registrants
change, from year to year, their primary performance measures used by
the registrant to link executive compensation during a fiscal year to
company performance?
9. Would a tabular list of a registrant's five most important
performance measures used to determine compensation actually paid be
useful to investors in addition to existing disclosures? As in the case
of the Company-Selected Measure above, how should we define
``importance'' and how should performance measures be ranked for this
purpose, particularly if multiple performance targets apply to the same
elements of compensation? Should we require disclosure of the five most
important performance measures or some other number of performance
measures? Would the inclusion of an additional tabular list of a
registrant's five most important performance measures dilute the impact
of, or otherwise lead to confusion regarding, the table that would be
required by the Proposing Release? Should we require that the five
measures be listed in order of importance? How could we increase the
usefulness of the tabular list of a registrant's five most important
performance measures for investors? Should there be disclosure of the
methodology behind those measures?
10. What would be the cost to registrants of any computations
required to identify and rank the five most important performance
measures? If registrants do not currently rank their performance
measures, would requiring them to list their five most important
performance measures in order of importance be unduly burdensome? Would
such disclosure contain information that is sensitive or has
competitive value to a registrant? Should an exemption from any
requirement to disclose the five most important performance measures be
available if the disclosure would contain such sensitive or competitive
information? If so, how should we specify the scope of any such
exemption?
11. What if a registrant's five most important performance measures
include measures that are included in the proposed rules or the
additional measures we are considering? Should registrants be permitted
to disclose fewer than five measures if they deem fewer than five to be
important or if they consider fewer than five measures?
12. Would a tabular format help investors locate, use and
understand disclosure of the five most important performance measures?
Are there practical or other considerations that would make such
tabular disclosure challenging or unduly burdensome for registrants?
Would this format impede registrants from providing meaningful
disclosure about their primary performance measures that factor into
determining pay?
13. Should we, either in addition to or in lieu of the proposed
rules and the disclosure of the additional measures we are considering,
revise Item 402 of Regulation S-K to explicitly require registrants to
disclose all of the performance measures that actually determine NEO
compensation? If registrants are already providing this disclosure, are
there ways we could improve this disclosure? For example, do investors
find current disclosures about executive compensation performance
measures complicated or difficult to analyze? If so, how could we make
these disclosures less complicated or facilitate their analysis while
also meeting the requirements of Section 953(a) of the Dodd-Frank Act?
14. To what extent would the ability of registrants to voluntarily
supplement the disclosure required by the proposed rules obviate the
need for additional mandated elements of disclosure considered in this
re-opening release? Should we rely on investor demand and individual
registrant circumstances to drive any additional disclosures? Would
such voluntary disclosures be more useful than the additional
contemplated disclosures? Would such disclosures lack comparability or
be overly subjective relative to the additional contemplated
disclosures?
15. As noted above, based on staff analysis of filings in 2019,
approximately 45 percent of registrants subject to the proposed rules
would be SRCs, compared to approximately 40 percent at the time of
publication of the proposed rules.\24\ In light of this, should we
reconsider the scaled requirements for SRCs in the proposed rules and/
or the additional measures we are considering?
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\24\ See supra footnote 5.
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16. For SRCs, would disclosure of either pre-tax net income or net
income be useful to investors when placed alongside the metrics
included in the Proposing Release? Are there different measures of
financial performance that would be more appropriate for SRCs? Should
we require SRCs to disclose a Company-Selected Measure and the list of
their five most important performance measures used to set NEO
compensation? Why or why not? What would be the burdens on SRCs of
providing this additional disclosure and would the benefits of
requiring this disclosure for SRCs justify the burdens? Would any such
burdens be mitigated by the fact that the Company-Selected Measure and
the list of a company's five most important performance measures are by
definition measures that the company already uses to link compensation
actually paid to financial performance? Is there relevant data on the
long-term costs from diminished transparency that we should consider in
this regard?
17. The Commission proposed to require that registrants use XBRL to
tag separately the values disclosed in the required table, and
separately block-text tag the disclosure of the relationship among the
measures, the footnote disclosure of deductions and additions used to
determine executive compensation actually paid, and the footnote
disclosure regarding vesting date valuation assumptions. We are
considering requiring registrants to also tag specific data points
(such as quantitative amounts) within the footnote disclosures that
would be block-text tagged. In addition, we are considering requiring
registrants to use Inline XBRL rather than XBRL to tag their pay versus
performance disclosure.\25\ Would additional detail tagging of some or
all of those specific data points within the footnote disclosures be
valuable to investors? If so, which specific data points within the
footnote disclosures should we require registrants to detail tag and
[[Page 5758]]
why? What would be the incremental costs of such a requirement? Should
we require registrants to use Inline XBRL rather than XBRL to tag the
proposed new pay versus performance disclosures? Is there an
alternative machine-readable language to Inline XBRL that we should
consider? Should we enable more flexibility by accommodating other
machine-readable languages? If we were to require Inline XBRL detail
tagging of the disclosures, should we exempt smaller reporting
companies from that requirement? \26\ Would the costs be different for
smaller reporting companies to comply with such a requirement as
compared to other registrants? Should we, as was proposed with respect
to the original XBRL tagging requirement, provide a phase-in for
smaller reporting companies for any Inline XBRL requirement that
includes additional detail tagging?
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\25\ Subsequent to the proposal, the Commission adopted rules
replacing XBRL tagging requirements for registrant financial
statements with Inline XBRL tagging requirements. Inline XBRL embeds
the machine-readable tags in the human-readable document itself,
rather than in a separate exhibit. See Inline XBRL Filing of Tagged
Data, Release No. 33-10514 (June 28, 2018) [83 FR 40846 (Aug. 16,
2018)]. The Commission also has subsequently adopted rules requiring
structured data reporting using Inline XBRL format for certain
business development company disclosures. See Securities Offering
Reform for Closed-End Investment Companies, Release No. IC-33836
(Apr. 8, 2020) [85 FR 33290 (June 1, 2020)]. As a result of those
changes, we are considering using Inline XBRL, rather than XBRL, for
the proposed tagging requirements.
\26\ Smaller reporting companies are currently subject to the
Commission's Inline XBRL tagging requirements, including detail
tagging requirements.
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18. Some commenters to the Proposing Release noted that the
definition of compensation actually paid may result in some
misalignment between the time period to which pay is attributed and the
time period in which the associated performance is reported, but they
generally disagreed on whether and how to revise the definition to
improve such alignment.\27\ Is there an alternative approach that would
reduce the risk of misalignment of compensation actually paid with the
associated financial performance and still provide for appropriate
comparability across registrants, including the additional measures of
financial performance discussed above? Would the inclusion of
additional measures of financial performance as contemplated above
affect this potential mismatch?
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\27\ See, e.g., letters from Allison Transmission Holdings, Inc.
dated July 6, 2015, Celanese Corp. dated June 12, 2015, Center On
Executive Compensation dated July 6, 2015, Frederick W. Cook & Co.,
Inc. dated June 24, 2015, Corporate Governance Coalition for
Investor Value dated July 23, 2015, Farient Advisors dated July 6,
2015, Jon Faulkner dated May 4, 2015, Financial Services Roundtable
dated July 6, 2015, Honeywell International Inc. dated July 2, 2015,
NACCO Industries, Inc. dated June 9, 2015, National Association of
Corporate Directors dated July 10, 2015, National Association of
Manufacturers dated July 6, 2015, Pearl Meyer & Partners dated July
6, 2015, Ross Stores, Inc. dated June 26, 2015, Shareholder Value
Advisors Inc. dated July 6, 2015, State Board of Administration of
Florida dated July 6, 2015, Teachers Insurance Annuity Association
of America dated July 6, 2015, Technical Compensation Advisors, Inc.
dated July 6, 2015, and WorldatWork dated July 6, 2015.
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19. Some commenters to the Proposing Release noted potential
challenges with using the pension service cost as defined in FASB ASC
Topic 715 to determine the amount attributable to pension plans to be
included in compensation actually paid.\28\ As discussed in the
Proposing Release, the service cost for services rendered by the
executive in the applicable year is meant to approximate the value that
would be set aside currently by the registrant to fund the pension
benefits payable upon retirement for the service provided during the
applicable year, and is intended to provide a more meaningful
comparison across registrants of the amounts ``actually paid'' under
both defined benefit and defined contribution plans. Is there an
alternative measure of the change in pension value attributable to the
applicable fiscal year that is better representative of the ``actually
paid'' amount of pension benefits for an executive and would reduce the
burden of computing compensation actually paid while preserving the
benefits of the measure for investors? If so, describe how that amount
would be calculated and what assumptions or new or additional data
would be necessary for such calculation.
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\28\ See, e.g., letters from AON Hewitt dated July 6, 2015,
Exxon Mobil Corp. dated June 23, 2015, Towers Watson dated July 6,
2015, and WorldatWork dated July 6, 2015.
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20. Some commenters to the Proposing Release noted potential
challenges associated with computing the fair value of options at the
vesting date as opposed to the grant date.\29\ Are there
simplifications or other adjustments that we could permit for this
purpose in order to mitigate such challenges? How, if at all, would any
such simplifications or adjustments affect the cost of producing the
disclosure and the usefulness of the disclosure? For example, are there
certain assumptions used in the valuation of options that we should
allow to be carried forward from the grant date rather than re-computed
as of the vesting date? What is the likelihood that assumptions would
vary significantly between grant date and vesting date? To what extent
could any new assumptions required for a valuation as of the vesting
date be determined based on computations that would be made for another
purpose, such as the valuation of new grants made around the same time?
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\29\ See, e.g., letters from Celanese Corp. dated June 12, 2015,
Center for Capital Markets Competitiveness dated June 30, 2015,
Frederick W. Cook & Co., Inc. dated June 24, 2015, and National
Association of Corporate Directors dated July 10, 2015. But see
letters from American Federation of Labor and Congress of Industrial
Organizations dated June 30, 2015, Council of Institutional
Investors dated June 25, 2015, Honeywell International Inc. dated
July 2, 2015, and Teachers Insurance Annuity Association of America
dated July 6, 2015.
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21. Some commenters to the Proposing Release had questions about
which time periods should be disclosed in the TSR portions of the
table.\30\ Should we clarify what time periods should be disclosed? For
example, should we require TSR to be a five-year cumulative and rolling
average (i.e., the TSR for the first year would be the average TSR over
the five years preceding and including the first year, the TSR for the
second year would be the average TSR over the five years preceding and
including the second year, etc.); \31\ should we require TSR to be a
cumulative average within the five-year period in the table (i.e., the
TSR for the first year would be an average of the TSR over that first
year, the TSR for the second year would be an average of the TSR over
the first year and the second year, etc.); \32\ or should we require
TSR to be an annual year-over-year figure (i.e., the TSR for the first
year would be the average TSR over the first year, the TSR for the
second year would be the average TSR for the second year, etc.)? \33\
What would the benefits and drawbacks be of each of these approaches?
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\30\ See letters from Center On Executive Compensation dated
July 6, 2015, Frederick W. Cook & Co., Inc. dated June 24, 2015,
Steven Hall & Partners dated July 6, 2015, Honeywell International
Inc. dated July 2, 2015, Mercer LLC dated July 6, 2015, Pearl Meyer
& Partners dated July 6, 2015, and Technical Compensation Advisors,
Inc. dated July 6, 2015.
\31\ See, e.g., letter from Honeywell International Inc. dated
July 2, 2015.
\32\ See, e.g., letter from Pearl Meyer & Partners dated July 6,
2015.
\33\ See, e.g., letters from Pearl Meyer & Partners dated July
6, 2015, and Technical Compensation Advisors, Inc. dated July 6,
2015.
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22. Are there any other developments (including with respect to
executive compensation practices) since the Proposing Release that
should affect our consideration of the proposed rules or their
potential economic effects? How have qualitative measures in executive
compensation packages changed and/or developed since the Proposing
Release? How should we contemplate such changes in our consideration of
the disclosures discussed above and in the Proposing Release? How have
environmental, social and governance related metrics changed and/or
developed since the Proposing Release? How should we contemplate such
changes in our consideration of the disclosures discussed above and in
the Proposing Release? Are there changes in market practices with
respect to disclosures in the CD&A or voluntary
[[Page 5759]]
disclosures that should affect our approach or affect our consideration
of the economic effects of any rule changes? Are there any changes we
should consider in the methodologies and estimates used to analyze the
economic effects of the proposed rules in the Proposing Release?
We request and encourage any interested person to submit comments
regarding the Proposed Rules, specific issues discussed in this release
or the Proposing Release, and other matters that may have an effect on
the proposed rules or the additional disclosure requirements we have
noted here that we are considering. We request comment from the point
of view of registrants, shareholders, directors, executives, investors,
other market participants, and anyone else with an interest in this
issue. If alternatives to the Proposed Rules are suggested, supporting
data and analysis and quantitative information as to the costs and
benefits of those alternatives are of particular assistance. Commenters
are urged to be as specific as possible; when commenting, it would be
most helpful if you include the reasoning behind your position or
recommendation.
If any commenters who have already submitted a comment letter wish
to provide supplemental or updated comments, we encourage them to do
so.
By the Commission.
Dated: January 27, 2022.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2022-02024 Filed 2-1-22; 8:45 am]
BILLING CODE 8011-01-P
</pre></body>
</html>Indexed from Federal Register on February 2, 2022.
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