The White House’s Office of Information and Regulatory Affairs (OIRA) updated its dashboard this week to note that the SEC has submitted a rule proposal titled “Executive Compensation Disclosure Reform,” signaling that the Commission will consider this rulemaking in the near-term. The Goodwin Public Company Advisory blog notes:
On August 26, 2026, the SEC submitted a rule proposal titled “Executive Compensation Disclosure Reform” to the White House’s Office of Information and Regulatory Affairs (OIRA). Those SEC rulemaking initiatives that are under review by OIRA are listed on a dashboard until the review is completed.
The SEC signaled that it was considering potential changes to the executive compensation disclosure rules by announcing a roundtable on executive compensation disclosure requirements on May 16, 2025. The roundtable was held on June 26, 2025, and the SEC also solicited comments on potential changes to the disclosure requirements. The agenda for the roundtable called for three panels to discuss the evolution of executive compensation disclosure over time and to explore whether the rules have achieved their policy objectives, the challenges in preparing the required disclosure, the types of disclosure that investors find material, and what the disclosure requirements should look like in the future.
A consistent theme throughout the roundtable was the complexity of the compensation tables and the required methodologies for reporting the required information. During the roundtable, the panelists addressed the concept of materiality, including whether executive compensation information is material to investors. Some of the panelists at the roundtable advocated for a move to principles-based disclosure requirements, while others indicated certain prescriptive disclosure requirements may be necessary. The panelists discussed the challenges with perquisites, including the need to disclose personal security for executives as a perquisite. Several panelists noted the significant difficulties that companies encounter with the executive compensation requirements adopted pursuant to the Dodd-Frank Act, including the pay versus performance disclosure requirements, the mandatory clawback requirements and the CEO pay ratio disclosure requirements. Approximately 70 substantive comment letters and over 1,000 form comment letters were submitted in response to the SEC’s solicitation of comment.
While OIRA has up to 90 days to review an agency’s rulemaking, it has typically approved most SEC proposals in a much shorter period of time. Once the rulemaking has been cleared by OIRA, the Commission could schedule or an open meeting to vote on the proposal or approve it by a seriatim process without the need for an open meeting.
With this submission, it is certainly shaping up to be an interesting September!
Earlier this week, I recounted my shareholder proposal odyssey, and while Homer may not have been impressed, I did receive some very nice feedback on the blog that I greatly appreciate. The submission of the executive compensation disclosure reform rulemaking to OIRA got me thinking about another professional odyssey, my quarter-century association with executive compensation disclosure requirements.
I fortunately get to do a lot of mentoring these days with law students (and the occasional undergraduate student), and one of the consistent themes that I mention to them is that you really have to be open to the possibilities when you are seeking employment or seeking to advance in your career, because often your practice area or your specialty will choose you, rather than you having to chase it. I have met so many lawyers over the years who started out as litigators and ended up as transactional lawyers (or vice versa), because they were open to the possibilities and, when presented with an opportunity, pursued a practice area or specialty that somehow magically chose them. In many ways, this is the story of my long-term association with the SEC’s executive compensation disclosure requirements.
When I left the SEC the first time, I was somehow following the advice that I was going to be delivering in the future, and I was open to the possibilities in private practice. Among the things that I got to do in private practice (beyond sleeping on my office floor using redwells as a pillow) was to be involved in the defense of SEC enforcement actions, which I found to be (mostly) enjoyable work. One high-profile Enforcement investigation that I was assigned to early on in my private practice stint involved allegations of non-disclosure of perquisites, and given my background as a Corp Fin attorney at the SEC, I was assigned the task of taking a deep dive into the history of the SEC’s disclosure requirements around perquisites. To me, it was a particularly exciting assignment, because I could delve back into the history of the Commission’s regulation of disclosure and piece together the rationale for perquisites disclosure, all for the purpose of poking holes in the Staff’s arguments as to why a disclosure violation had occurred. Through the course of this project, I inevitably developed an encyclopedic knowledge of all of the executive compensation disclosure requirements beyond just the narrow topics of perquisites, which proved to be useful when engaged in the more mundane task of reviewing proxy statements.
Fast forward a couple years later, and let’s just say that private practice was not for me (and still isn’t, if I have to be honest), and I had the opportunity to return to the Commission in the Corp Fin Chief Counsel role. As fate would have it, one of the topics on the SEC’s agenda was executive compensation disclosure reform, prompted by angry investors with torches and pitchforks, who were rightfully outraged by the events of Enron, WorldCom, etc. and the ways in which executive compensation had played a role in encouraging such bad behavior. My newly-acquired executive compensation disclosure expertise, combined with the deep subject matter expertise of others in the Division, proved to present the perfect opportunity for embarking on a rulemaking that would change the arc of my professional life. From doing the underlying research, to preparing the term sheet and the releases, and appearing with a person who my son thought was Jack Sparrow on C-SPAN, it was an amazing, wild ride, and I felt proud of the rules that we all worked so hard to create. However, much like Odysseus after vanquishing the Trojans, a series of events related to that rulemaking shortly thereafter brought a close to my SEC career, and sent me on the odyssey that I remain on today. Along the way, thanks to Broc Romanek and Mark Borges, I had the opportunity to co-author The Book about The Rules, which we know today as the Executive Compensation Disclosure Treatise.
While at this point I am not sure that I will ever make it back to Ithaca, I am pleased that, twenty years later, the Commission is going to consider amendments to the executive compensation disclosure requirements that I worked so hard to bring to life. I whole-heartedly agree with the remarks that Chairman Atkins made when the roundtable was announced last year: “It is important for the Commission to engage in retrospective reviews of its rules to ensure that they continue to be cost-effective and result in disclosure of material information without an overload of immaterial information.” I often say (mostly to myself these days) that the executive compensation disclosure requirements have, throughout history, been like a Christmas tree, where you are constantly adding ornaments, but rarely deleting any that have outlived their usefulness. I think now is a good time to do some editing of the ornaments, and we will find out soon what the Commission has in mind.
You may ask yourself, why is Dave hawking the 2026 Proxy Disclosure Conference and the 23rd Annual Executive Compensation Conference so much, to the point that we have been subjected to his very annoying sales pitch nearly every day this week? Well, there are several very good reasons: (a) due to some cosmic dictate emanating from the great and exalted Broc Romanek, creator of this blog, I am obligated to bring you three blog entries every morning, come Hell or high water; (b) we are at the end of August when the SEC and others are not as likely to be emanating blogworthy events; and (c) most importantly, as a serial securities law conference organizer and promoter, I know that our October Conferences are going to be epic and you definitely do not want to miss them, so, out of the kindness of my heart, I am reminding you that you need to sign up now.
If past experience is any indicator, it now appears likely that the Commission will propose amendments to the executive compensation disclosure requirements within the next month, right before our October Conferences. As a result, you will be able to learn about these proposed amendments and what they will mean for your practice in real time. Our agenda offers many opportunities for exploring the proposed changes, including:
– My conversation with Christina Thomas, Deputy Director & Chief Advisor on Disclosure, Policy and Rulemaking in Corp Fin, which will kick off the 2026 Proxy Disclosure Conference;
– The panel “The SEC All-Stars: Proxy Season Insights” at the 2026 Proxy Disclosure Conference;
– The panel “The SEC All-Stars: Executive Compensation Nuggets” at the 23rd Annual Executive Compensation Conference;
– The panel “Your Compensation Disclosures: New & Improved (We Hope)!” at the 23rd Annual Executive Compensation Conference; and
– Throughout the many other panels, to the extent relevant to the conversation.
I look forward to seeing you in Orlando. You know the drill by now, you can register online or contact us at info@CCRcorp.com or 1-800-737-1271.
Last October, Glass Lewis announced plans to change the firm’s approach to delivering advisory services, contemplating a move away from singularly-focused research and vote recommendations based on a global voting policy toward providing multiple perspectives that reflect the viewpoints of clients. At the time of the October 2025 announcement, Glass Lewis had not yet worked out what this new approach would look like, advising that it would outline the changes in future communications.
Yesterday, Glass Lewis sent a message to clients outlining a proposed new approach for a multi-perspective framework, as well as describing a comment period on the proposed new approach. The framework contemplates four distinct perspectives, which are described as follows:
1. Business Fundamentals – Takes a flexible view of governance standards when boards and management teams have demonstrated a strong record of generating shareholder returns
2. Foundational Governance – Treats core governance standards as essential to safeguard long-term shareholder value
3. Global Stewardship – Pairs core governance standards with rigorous oversight of financially material sustainability risks to protect long-term shareholder value
4. Sustainability Focused – Pairs core governance standards with rigorous oversight of sustainability risks that are or could become financially material over extended time horizons and across portfolios. Recognizes that asset owners have a fiduciary interest in the stability and integrity of the markets in which they invest
The message indicates that clients will receive a consultation paper and survey questionnaire as well as a comparison paper on the four perspectives. Clients will have the opportunity to participate in a comment period beginning next month. It is contemplated that the new research perspectives will be live in September 2027.
Glass Lewis notes that it will continue to provide its Benchmark Voting Policy Guidelines for the 2027 proxy season. The firm notes that it will make limited changes to these guidelines, only integrating significant regulatory and corporate governance developments from 2026. Glass Lewis anticipates publishing these guidelines for major markets in early October 2026.
Let’s face it, it is not easy being a proxy advisory firm these days. If I were running one of these firms, I think that I would have the feeling that everyone is out to get me. When I last discussed the topic of proxy advisory firms back in June during our annual CompensationStandards.com webcast “Proxy Season Post-Mortem: The Latest Compensation Disclosures 2026,” I described the contours of a complex multi-front battle that proxy advisory firms are fighting at the federal and state level.
Weirdly, it has become an annual tradition that I frame my remarks on this webcast around some pop culture reference, and this year I chose to celebrate the theatrical release of Toy Story 5 with some bizarre Toy Story references that I tied to my topics. I attempted to sum up the situation for proxy advisors with this Toy Story tie-in:
Sticking with my Toy Story theme, I’m going to talk a little bit about the proxy advisory firms and what they’re going through at the moment. If you’ve watched Toy Story 4,000 times like I did because my kids were young when it first came out, you will certainly remember Sid Phillips, who is the neighbor of Andy. Andy is the owner of the toys, Woody and Buzz.
Sid had a penchant for torturing toys, including Woody when he got a hold of him. One can envision a world where young Sids like that would grow up to be politicians and regulators and state attorneys general who would turn their attention to proxy advisory firms instead of mounting doll heads on Erector set legs and things like that. That’s what we’re seeing with the proxy advisory firms as they are facing a multi-front attack, both at the federal and state levels.
Yet another lawsuit has been filed in this ongoing battle, with ISS commencing litigation earlier this month against the Attorney General of Oklahoma to challenge that state’s “copycat” law targeting proxy advisory firms. The law was enacted in May and will go into effect in November, absent court action. An article from The Journal Record notes:
HB 4429, known as the Proxy Advisor Transparency Act, was model legislation peddled by Consumers Defense, the policy arm of Consumers’ Research, a conservative consumer protection nonprofit.
The bill is modeled on a Texas law passed last year. At least 13 states have followed Texas’ lead, but so far, only Oklahoma, Kansas and Indiana have successfully managed to pass the bill through their state legislatures.
“Over the past year, three federal courts have granted preliminary injunctions against similar laws in Kansas, Indiana and Texas,” Institutional Shareholder Services said in a statement, “and we strongly believe a similar result is warranted in Oklahoma.”
Institutional Shareholder Services, an international investment management firm with more than 40 years of history as an industry leader, called the requirements Oklahoma’s HB 4429 imposes “onerous.”
“As it has in other states, ISS is challenging the constitutionality of a new Oklahoma statute aimed at undermining its business by burdening its ability to speak freely on matters of corporate governance,” the statement read. “ISS refuses to back down from overreaching, unconstitutional attempts by state governments to violate free speech and distort the free flow of information to institutional investors.”
According to market data, Institutional Shareholder Services and Glass Lewis, another major proxy advisory firm, control roughly 90% of the proxy advisory industry.
In an Institutional Shareholder Services’ complaint filed with the U.S. District Court for the Western District of Oklahoma, the firm argued that many issues arise for shareholder votes that do not “lend themselves to financial prediction,” such as voting for or against reelecting a board member who has missed meetings.
“The law ignores that different clients ask ISS to give advice based on each client’s own (and often differing) views about the best way to advance shareholder value,” the complaint read. “Moreover, attempting to perform this ‘written financial analysis’ would force ISS to take positions on controversial issues that ISS would not otherwise.”
We have not yet seen the SEC enter the fray, but based on the directives from a December 2025 Executive Order, it most certainly will, and in all likelihood soon.
If you find that keeping up with the developments affecting proxy advisory firms is about as difficult as trying to keep track of the friendship status of Woody and Buzz, then you should definitely join us in Orlando in October for the 2026 Proxy Disclosure Conference and the 23rd Annual Executive Compensation Conference. Across two full days of panels, we are going to talk about all of the developments that you need to know as we go into a particularly interesting proxy and annual reporting season. I look forward to hearing from our outstanding group of speakers on a wide array of topics, including the SEC’s extraordinarily active regulatory agenda, the state of shareholder activism, developments with tokenization, the views of the proxy advisory firms, executive compensation disclosure developments, and so much more. I encourage you to register online or contact us at info@CCRcorp.com or 1-800-737-1271.
Continuing the Toy Story theme – while you are in Orlando, I encourage you to check out Buzz Lightyear’s Space Ranger Spin ride in Tomorrowland at Disney’s Magic Kingdom. It is one of my all-time favorites!
The Staff’s latest announcement that it is completely getting out of the business of serving as the Rule 14a-8 referee sparked both admiration and jealousy on my part, because I can distinctly remember sitting in a room late at night at the SEC, poring over a stack of memos from the Rule 14a-8 task force, and saying to whoever was sitting there with me: “How can we get out of this nightmare?” Apparently, all that we had to do was issue an announcement saying “We are out!” Sometimes, the most obvious solution is the best one.
While Rule 14a-8 no-action letters were our favorite task to complain about in the Corp Fin Chief Counsel’s office back in those days, at the same time they were also kind of fun. My old friend Marty Dunn would often lament that shareholder proposals got too “corporate” in more recent years – back in the day, the realm of shareholder proposals was populated by some particularly colorful characters that made things very interesting, such as Evelyn Y. Davis, with whom I had some of the weirdest conversations of my professional life.
Further, the shareholder proposal task force that was hastily assembled each year to tackle all of the incoming Rule 14a-8 no-action requests was comprised of an elite group of up-and-coming talent in the Division, and they were always energized by the time-constrained season and the epic Lucy-in-the-Chocolate-Factory amount of work that was necessary to consider the incoming requests. Getting selected for the shareholder proposal task force was a professional honor, and it often served as a pipeline for talented lawyers to end up in the Chief Counsel’s office or one of the Division’s other “support” offices.
What I think we all enjoyed most about working on the Rule 14a-8 no-action letters was that it was the closest thing in the work of the Division to what “real” lawyers do, in that you would have to research precedent, consider the application of that precedent to the particular fact pattern, and write a cogent, persuasive memo supporting the outcome that you proposed, which were all tasks that were very different from writing comments on disclosure in the branches. There was certainly the interesting legal aspect of it all, but there was also the more exciting policy and political elements that needed to be carefully weighed.
In my time in Corp Fin, everyone involved in the process zealously guarded the ramparts of stare decisis when it came to considering each Rule 14a-8 no-action request in the context of what the Commission and the Staff had decided on important policy and legal questions. Bill Morley and Marty Dunn would not have had it any other way, because they recognized that both the companies and the proponents involved in the process deserved fairness and certainty in the outcomes, otherwise the whole process would lack credibility and the parties would just move to the courts to resolve their differences. In recent years, this ethos was most certainly lost in the Rule 14a-8 realm, as the Staff positions articulated in successive Staff Legal Bulletins shifted wildly with the political winds, erasing any sense of credibility and demonstrating little mooring to the previously articulated Commission and Staff positions that we all worked so hard to protect.
I think the greatest takeaway from those days of working on Rule 14a-8 no-action requests was the camaraderie and teamwork that came with trying to do an impossible task within a very tight timeframe. I thoroughly enjoyed hearing the constant give-and-take between members of the shareholder proposal task force, the wise words from Bill Morley and Marty Dunn, the griping about the deadlines and avalanche of requests, and – perhaps most importantly – the end of year wrap parties, which were epic. Following one of the wrap parties at which I may have been overserved, I ended up sleeping through my train stop in Baltimore and was then summarily thrown off the train in Wilmington, Delaware in the middle of the night, with no trains heading back the other way – I am sure Odysseus could relate to my off-course experience.
But I do not intend this story of my shareholder proposal odyssey as an ode to the Staff’s now cast-aside no-action letter process – rather, it is dirge to an old friend that had outlived its usefulness. Some things just don’t make sense anymore in the face of the relentless passage of time and changing norms. The constantly shifting Staff positions on key issues corrupted the process, calling into question the utility of the Staff’s no-action positions when the Staff’s approach could radically change following the next election cycle. The Staff’s resources are significantly constrained, and it is certainly valid to question whether responding to Rule 14a-8 no-action requests is the Staff’s highest and best use. And there is some merit to the argument that we have plenty to go on thanks to all of the Staff’s hard work over the course of decades of answering Rule 14a-8 no-action requests and drafting Staff Legal Bulletins, so maybe it is our turn as outside practitioners to make the hard calls without the Staff as our crutch. I tend to think that we are up for it, but maybe we should start organizing our own wrap parties for the end of the season – at least that would give us something to look forward to!
Now that the Corp Fin Staff has stripped back their process around Rule 14a-8 exclusion requests to no longer offer an option of providing a response to a company’s representation that it has a reasonable basis to exclude the proposal, the inevitable question arises as to what will we say in our Rule 14a-8(j) notices going forward. Meredith recently addressed this issue in the Proxy Season Blog here on TheCorporateCounsel.net. Her blog notes:
Now that Corp Fin has issued its announcement that it will discontinue responding to Rule 14a-8 no-action requests entirely and indefinitely, and no longer respond with a letter indicating that it will not object if a company omits a proposal, companies now know that the process they will follow if they want to exclude a shareholder proposal in the 2027 proxy season will be similar to the 2026 season – but slightly different. This Gibson Dunn blog extrapolates on what Rule 14a-8(j) notices will still include, and what they won’t.
“Companies can expect continued engagement with shareholder proponents as part of their overall shareholder engagement activities, and will need to carefully evaluate any shareholder proposals they receive. As noted above, if a company determines to exclude a proposal because the proposal or proponent has not satisfied Rule 14a-8, the company must still notify the Division and the proponent of its intention to exclude the proposal. However, as the Division will no longer issue a ‘No Objection’ letter, the exclusion notice will not need to include an ‘unqualified representation’ that the company has a ‘reasonable basis’ to exclude the proposal, which is what the Division requested in exchange for the Division’s issuing a ‘No Objection’ letter in the 2025-2026 proxy season.
Under Rule 14a-8(j), the exclusion notice nevertheless should include ‘an explanation of why the company believes that it may exclude the proposal, which should, if possible, refer to the most recent applicable authority,’ and a supporting opinion of counsel when such reasons are based on matters of state or foreign law. That explanation will continue to be closely scrutinized by other shareholders and by proxy advisory firms, as well as by shareholder proponents, and remains subject to potential legal challenge. As such, companies should continue to work closely with inside or outside counsel to assess the merits of their arguments before deciding to exclude a proposal.”
Practices will no doubt continue to evolve as we move through this uncharted territory in the time leading up to the proxy season, and we will keep you apprised of all of the developments. The Proxy Season Blog is available to subscribers of TheCorporateCounsel.net. If you do not have a subscription – which provides access to all of the amazing resources on our website – I encourage you to email info@ccrcorp.com or call 800-737-1271. You will not regret it!
It is hard to believe that the summer is winding down and our October Conferences are just a little over a month away. Our “Proxy Disclosure & 23rd Annual Executive Compensation Conferences,” which are taking place on October 12-13th in Orlando and virtually, could not be coming at a better time. This is indeed a season of change, and our goal at these conferences is to provide you with the knowledge and tools that you will need to navigate through these very interesting times. You can register online or contact us at info@CCRcorp.com or 1-800-737-1271. I look forward to seeing you there!
Prediction markets are all the rage these days. If you have a strong hunch as to what the high temperature at Los Angeles International Airport is going to be on Saturday, then prediction markets may be the thing for you! As a securities lawyer, I have generally perceived prediction markets to be largely outside of my purview, because the actual instruments underlying prediction market transactions are swaps that are referred to as “event contracts.” The CFTC is the federal regulator of event contracts that do not have a security component, first addressing the topic way back in 1992 in a no-action letter to the Iowa Electronic Markets, which is acknowledged to be the first U.S.-based prediction market platform. Given the regulatory divisions established by the good ole’ Dodd-Frank Act, the SEC has jurisdiction over security-based swaps, while the CFTC oversees all other swaps.
The landscape may be changing soon, as the exchange operator MEMXannounced earlier this month that it had filed a proposed rule change with the SEC seeking to allow the exchange to list Equities Based Exchange Prediction Contracts, or EPCs. The announcement notes:
MEMX’s EPCs are event contracts on publicly traded companies designed to provide investors with targeted exposure to objective, quantifiable measures of a company’s financial performance, including earnings, revenue, sales and other key issuer-specific metrics.
Investors would be able to trade complementary YES and NO contracts with prices ranging from $0.01 to $0.99. The proposed contracts would trade on MEMX Options, a registered national securities exchange, and would benefit from central clearing, know-your-customer requirements and MEMX’s existing regulatory and market-surveillance programs.
Subject to the SEC’s approval of the proposed rule change and the achievement of operational readiness, MEMX is targeting an early 2027 launch for EPCs.
In its notice seeking comment on the proposed rule changes for MEMX, the SEC notes:
[T]he Exchange’s proposal responds to this growing market demand for event-based products by establishing a framework for the listing and trading of securities event contracts as standardized options on the Exchange. In doing so, the proposal would bring these securities products within the established regulatory infrastructure applicable to listed options, including exchange trading and surveillance, standardized disclosure, and centralized clearance and settlement through a registered clearing agency, as further described below. To implement this framework, the Exchange proposes to adopt new Chapter 30 of the Exchange Rules governing the listing and trading of securities event contracts on MEMX Options.
Securities event contracts are cash-settled, European-style binary options that are based on the outcome of an event question related to the financial performance of an issuer of an NMS stock. A securities event contract provides a fixed payout if the condition specified in the contract terms occurs in the manner specified in the contract terms and expires without a payout if that condition does not occur. The proposed rules are intended to support securities event contracts based on objective, verifiable events relating to the financial performance of the issuer of an underlying security. Under the proposal, the Exchange would initially list securities event contracts based on an underlying financial metric, such as whether an issuer announces earnings, revenues, sales, or another key financial metric that is equal to or exceeds a specified threshold. At the same time, the proposed framework preserves flexibility for the Exchange to propose additional securities event contract types in the future, including contracts based on other events affecting the issuer’s financial performance that may not involve an underlying financial metric, subject to a separate proposed rule change.
We will be monitoring this development, as the availability of EPCs or other securities-based event contracts could have significant implications for public company insider trading policies and compliance efforts.
