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.
