Corporations are falling short in explaining to investors how executives are compensated and for what, Securities and Exchange Commission officials said Tuesday in their first review of corporate filings since new pay disclosure rules were put in place.
The S.E.C. called on corporations to give investors more insight into how they made compensation decisions and to ensure that proxies were “clear, concise and understandable.” Corporate boards, regulators said, could also do a better job in discussing how they chose performance targets, severance packages and the peer companies they used as comparisons for their pay practices.
“We found ourselves asking this question over and over and over again: Where’s the analysis?” said John W. White, the S.E.C.’s top official in charge of the new rules, calling it the “the biggest shortcoming” of compliance with the new pay disclosure rules.
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