SEC Proposes Cutting Executive Pay Reports to Two Officers

The Securities and Exchange Commission proposed a rewrite of executive pay disclosure on November 13, 2026, that narrows the spotlight to two people. The proposal, File No. S7-2026-39, would focus compensation reporting on the principal executive officer and the principal financial officer of each public company. The current rules in Item 402 of Regulation S-K typically cover five or more named executive officers. The commission calls it the first comprehensive overhaul of the framework since 2006.

Chairman Paul S. Atkins framed the package as a materiality project. The amendments would make the requirements more principles-based and reduce compliance burdens for registrants, the commission says, while keeping the disclosure of material information to investors. In his statement on the release, the agency's goal is clearer, more concise pay reporting that's rooted in what actually matters to a company's results, not in volume for its own sake.

The tables change shape along with the roster. The proposal replaces the current primary pay tables with three new ones: an Earned Compensation Table, a Granted Compensation Table and a Status of Equity Awards Table, each with accompanying narrative. The redesign aims to let investors track an equity award through its lifecycle, from grant to vesting to payout, instead of reconstructing it across four separate tables that don't reconcile cleanly.

The perquisite threshold is the single largest numeric change. Companies currently report an executive's perks once their aggregate value passes $10,000. The proposal raises that floor to $150,000, a fifteenfold increase, and adds a new de minimis tracking exclusion. Personal aircraft use, cars, club dues and similar benefits below $150,000 in total would no longer surface in the pay tables at all. Supporters call the old threshold a paperwork trap. Critics call the new one a curtain.

The narrative section shrinks too. The Compensation Discussion and Analysis, the part of the proxy where a board explains how it set pay, would become principles-based with a short list of required topics. The current rule steers companies through a long list of examples, which the commission says produces boilerplate that repeats from year to year. A shorter required core puts the burden on each board to explain its own pay logic in its own words, and gives investors less standard text to compare across companies.

Nothing changes yet. This is a proposed rule, not an adopted one, and the comment period runs for 60 days after the proposing release is published in the Federal Register. The release numbers are 33-11455 and 34-106873, and the citation covers parts 229, 232, 239, 240, 249 and 274 of Title 17. Companies, investors and advisers who want a say have to file inside that window, because the text the commission votes on next will be built from that record.

The review behind the proposal started before this fall. The commission requested public comment and held a roundtable on executive compensation in July 2025, drawing more than 80 comment letters from investors, companies and advisers. Twenty years have passed since the last comprehensive evaluation in 2006, a span that covers the financial crisis, the Dodd-Frank pay rules and the entire rise of nine-figure equity packages. The 2006 framework was built for a pay world that no longer exists.

The practical fight is over what investors lose. Pay for the third, fourth and fifth officers is often where succession plans, retention risk and internal pay gaps show up first. A two-officer rule hides that layer until a departure makes it news. The commission's answer is that material information still has to be disclosed, and that the two officers who matter most to results will be covered in more depth than the current tables allow. The comment file will test whether investors believe that trade.