On August 25, the SEC adopted rule amendments that require registrants to disclose, in proxy or information statements in which executive compensation disclosure is required, information showing the relationship between compensation actually paid to their named executive officers and the company’s financial performance. Emerging growth companies, foreign private issuers, and registered investment companies are not subject to the new requirements, which apply in scaled form to smaller reporting companies.

Under a new paragraph (v) to Item 402 of Regulation S-K, registrants are required to disclose in a table the compensation actually paid to their named executive officers and specified financial performance measures for five fiscal years (three years in the case of smaller reporting companies), subject to a phase-in period. The tabular presentation must be accompanied by a clear description of the relationships for each fiscal year between such compensation and the financial performance measures. The registrant also must present a tabular list of the most important financial performance measures used to link such compensation to company performance for the most recently completed fiscal year.