Monthly Archives: July 2025

Here are takeaways from the SEC’s Executive Compensation Disclosure Roundtable that Meredith shared yesterday on CompensationStandards.com:

Last Thursday, the SEC held its roundtable on executive compensation disclosure requirements. Our own Dave Lynn (who spoke on a panel) noted on TheCorporateCounsel.net blog on Friday that the event was well-attended. If you missed it — either in person or virtually — the SEC posted a replay of each panel on the SEC’s YouTube channel. And if listening to 4+ hours of discussion about the SEC’s executive compensation disclosure requirements is just not in the cards for you right now (or ever), we’ve got you covered!

In blogs on TheCorporateCounsel.net on Friday, Dave shared his thoughts and excerpts from the remarks by Chairman Atkins and Commissioners Crenshaw, Peirce and Uyeda. On the Proxy Disclosure Blog, Mark Borges (who also spoke on a panel) shared a few thoughts about revisiting the current disclosure requirements that occurred to him as he listened to the various panelists.

Today, I thought I’d share high-level topics, ideas and themes that I heard throughout the three panels, many of which were teed up in advance by Chairman Atkins, and whether there was consensus or some disagreement among the panelists. Here are a few:

– How or whether executive compensation disclosure requirements drive or distort compensation decision making

• Panelists cited the requirement to hold a say-on-pay vote and compensation committees taking into account investor and proxy advisor policies
• Panelists also noted that including executive security spend in the Summary Compensation Table’s calculation of “Total Compensation” can distort investor and proxy advisor perception and analysis of pay (although corporate representatives stressed that the board will make decisions in the best interest of the company regardless)

 

– Whether the executive compensation disclosure requirements effectively convey how the board and compensation committee consider compensation

• A number of panelists supported the suggestion that the disclosure requirements more closely reflect the presentation of pay in board materials — including the “target” and “outcome” tables that compensation committees use

 

– Whether “more is better”

• Investor representatives generally made suggestions for additional disclosures, and issuer or advisor representatives generally suggested that the rules could be shortened and streamlined
• Repeated “asks” by investor representatives included that quantitative disclosures be machine-readable and that the disclosures more clearly present the life-cycle of an equity award

 

– Whether the executive compensation disclosure rules are too granular and attempt to elicit disclosure of ALL the information ANY investor might want to know, instead of focusing on materiality and the reasonable investor standard

• If you’re wondering about the title of this blog, CII’s Bob McCormick shared a story about his high school job making ice cream. He once asked the owner why they make some unusual flavors that weren’t very popular. The owner explained that one customer — who drove 30 minutes each way — really liked them. From there on out, “rum raisin ice cream” was a favorite call back, but panelists disagreed whether the rules should require companies to keep making rum raisin ice cream — i.e., keep disclosing information that is very valuable only to a small subset of investors. Now you know!

 

– Whether simplifying the Item 402 disclosure requirements would actually result in shorter disclosures

• As Dave noted, while say-on-pay required very little disclosure, companies significantly expanded their voluntary disclosures after these votes were legislatively mandated

 

– The complexity and homogenization of pay and the factors driving these developments

• There was generally consensus that companies feeling like they have to follow a “one-size-fits-all” approach to pay programs — with most pay in the form of PSUs — is a bad thing for both companies and shareholders, and that flexibility — including to simplify equity programs to largely time-vested with a long holding period — would be beneficial

 

– Consensus that the prescriptive, tabular requirements generally provide overly complicated and difficult to use disclosures, while some voluntary disclosures are particularly useful (including presentations of realized and realizable pay)

• A few investor representatives described the complicated process they follow to understand executive equity awards, which involves flipping between numerous tables and referencing Form 4s

 

– Consensus among the issuer and advisor representatives that compensation disclosures are too costly to prepare

• Corporate representatives stressed that “every dollar matters” for companies both large and small, while also noting the outsized burden on less-resourced small- and mid-cap companies

We’ll be posting memos — like this Weil resource identifying four themes — in our “SEC Rules” Practice Area on CompensationStandards.com and sharing more content & takeaways from the roundtable and submitted comment letters over the next weeks and months. We’ll also be covering this and any updates at our “Proxy Disclosure and 22nd Annual Executive Compensation Conferences.”

Our 2025 Conferences will be taking place Tuesday & Wednesday, October 21 & 22, at the Virgin Hotels in Las Vegas, with a virtual option for those who can’t attend in person. The early bird rate expires July 25th! You can sign up by emailing info@ccrcorp.com or calling 800-737-1271.

– Liz Dunshee

Often, when I whine about the shrinking number of public companies and the absence of a robust pipeline for initial public offerings, I am very focused on the plights of securities lawyers and the companies they represent. But that is pretty self-centered, because the stock exchanges are also sad. There’ve been fewer bell-ringing parties, probably, among other reasons for wanting more listings.

So, it’s not too surprising that the major exchange operators are responding to the SEC’s call for deregulatory feedback. Reuters reported last week that Nasdaq and NYSE reps are among the groups that are sharing ideas with the SEC that could ease the burden of becoming – and remaining – a public company. Reuters describes some of the topics that may be on the table:

One area in focus is an overhaul of current proxy processes, which involves information that companies have to provide shareholders to allow them to vote on various matters.

The reform would make it harder for activist shareholders with small stakes to launch proxy contests and curb repetitive proxy proposals from minority investors, the sources said. It would also lead to less onerous disclosure requirements in preliminary proxy filings, according to the sources.

Another effort involves making it less expensive for companies to list on exchanges and remain public by reducing fees associated with listing, the sources said.

The conversations also include making it easier for companies that went public through deals with special purpose acquisition companies (SPACs) to raise capital, the sources said. In recent years, the SEC had cracked down on SPACs, in which a firm goes public by selling itself to a listed shell company, as a work around listing regulations.

The rollbacks would also make it easier for public companies to raise capital by selling additional shares through follow-on offerings, they said.

Meanwhile, as Dave shared last week, “capital formation” legislation has also advanced in the House. If you have ideas for improving the regulatory framework, don’t forget to add your two cents to the suggestion box!

– Liz Dunshee

It’s important to remember that regulations can only bear so much blame for the lack of initial public offerings. A bigger part of it is the market – where banks steer deal flow, availability of capital and high valuations in private fundraising rounds, and overall public market performance and perceptions. This Bloomberg article says there are reasons for optimism for those of us on Team IPO – with a few caveats:

At nearly the half-way mark of the year, IPOs on US exchanges have raised $29.1 billion, surging 45% versus the same period last year, according to data compiled by Bloomberg.

That’s not nearly as good as it sounds.

Proceeds from IPOs are actually down from last year, when you excise the $12.1 billion of blank-check vehicle listings — an increase of more than 400% from last year. While special purpose acquisition companies have raised a lot of money in listings, some of the underwriters’ fees are deferred until the blank-check merges with a private firm and takes it public. That activity remains depressed compared to the heady levels of 2021.

Excluding SPACs and tiny listings by companies raising less than $50 million, only 33 IPOs have priced this year, down from 41 in the first half of 2024.

I’m going to take a “glass half-full” view of these stats and our current environment. For one thing, the article shares predictions that the second half of 2025 and into 2026 will be a busy time for public offerings.

Second, even though the article disregards “tiny listings,” those deals help disprove the stereotype that today’s public markets are only for later-stage companies with huge valuations. The smaller companies are also an important part of the market – and they’re often pretty fun to work with, too.

– Liz Dunshee