The new SEC “pay for performance” disclosure rules, coming into force for this year’s proxy season, will set new ground rules on corporate disclosure standards for “say on pay” voting. As companies are busy preparing their filings, the new rules provide an opportunity to rethink what metrics would be most useful for investors as they evaluate executive compensation and company performance.
Pay for performance is the usual mantra for CEO pay in public companies, but this assumes that it is possible to measure CEO performance over a long enough timeframe to matter, and that this relationship is motivating to CEOs.
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