Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

SEC reopens pay vs performance disclosure proposal

Defining Issues | January 2022

Comment period on 2015 proposal to implement Section 953(a) of Dodd-Frank Act reopened with additional questions.

Two African American women standing near pillared building entrance

In April 2015, the SEC proposed rules that would have required registrants to disclose the relationship between executive compensation and the financial performance of the registrant. The SEC is now revisiting the proposal and reopening the comment period. 


  • Public companies (exceptions for foreign private issuers, emerging growth companies and registered investment companies)

Relevant dates

  • April 29, 2015 – Proposal issued
  • January 27, 2022 – Comment period reopened 
  • 30 days after publication in Federal Register – Comments due on proposed rule 

Key Impacts:

In 2015, the SEC proposed a rule that would have implemented certain provisions of the Dodd-Frank Act. The rule was never finalized.

Overview of 2015 proposal

  • Require disclosures of executive compensation and a measure of financial performance (total shareholder return) in a tabular format for each of the five most recently completed fiscal years.
  • Require description in narrative or graphical format to show the relationship between the executive compensation and the total shareholder return as well as companies’ peer groups. 
  • The determination of compensation paid would require inclusion of service costs portion of pension benefits and the fair value of equity awards on their vesting dates.
  • Executives to be included in the disclosures would include the principal executive officer (PEO) and non-PEO named executive officers (NEOs).  
  • Could require the need to update systems to capture the new information required under this proposed rule. 

Key concerns expressed on 2015 proposal

  • Using total shareholder return as the sole measure of financial performance and whether a ‘one size fits all’ benchmark is appropriate for all companies.
  • Potential complexity and burden in the calculation of the fair value of equity awards at vesting dates.
  • Additional burdens these disclosures could have on smaller registrants.
  • Read the KPMG comment letter here.

On January 27, 2022, the SEC reopened the comment period for this proposal, seeking incremental feedback.  

In the new release, the Commission noted it is considering requirements to disclose the following measures of performance in addition to total shareholder return:

  • Pre-tax net income 
  • Net income 
  • A company-selected measure (the most important performance measure from the company’s perspective). 

Select additional areas for feedback sought from 2022 comment period:

  • Whether the disclosure of additional financial performance measures (including those noted above) beyond total shareholder return should be required.
  • Whether there are other measures of performance that should be mandated in addition to, or instead of, pre-tax net income and net income.
  • How the disclosure of the ‘Company-Selected Measure’ should be defined.
  • Whether disclosure of the five most important performance measures used to determine executive compensation (in ranked order) should be required.
  • Whether simplifications or other adjustments to the methods used to determine pension benefits and fair value of options at the vesting date could reduce complexity and still provide useful information. 

The SEC has posted a fact sheet outlining the background and next steps related to this proposal. 

Download the document:

SEC Proposes Rules for Pay-for-Performance

Download PDF

Explore more

Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.