SEC adopts Inline XBRL for Pay Versus Performance disclosures
The US Securities and Exchange Commission (SEC) has published its final rule on Pay Versus Performance, introducing digital disclosures in Inline XBRL. These comprise information reflecting the relationship between the executive compensation paid by a public company and its financial performance, and are intended to enable investors to assess companies’ decision-making in this arena.
“The Commission has long recognized the value to investors of information on executive compensation,” says SEC Chair Gary Gensler. “I think that this rule will help investors receive the consistent, comparable, and decision-useful information they need to evaluate executive compensation policies.”
Companies will now be required to provide a table disclosing compensation and performance measures for the past five years (with a shorter three-year period for smaller companies), and to tag each value in the table and footnotes in Inline XBRL. They will also need to block-text tag the footnotes and a description of the relationships between the reported measures.
The SEC first proposed disclosure rules back in 2015, and reopened the comment period at the start of this year. The requirements will now come into force for fiscal years ending on or after 16 December 2022.