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On May 19, 2026, the Securities and Exchange Commission (SEC) proposed substantial changes to the filing categories for U.S. public company disclosure requirements. The primary intent of these changes is to reduce disclosure complexity and compliance costs to encourage more companies to go and stay public.
The proposal replaces the existing range of filer categories – large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies and emerging growth companies – with just two: large accelerated filers and non-accelerated filers. Non-accelerated filers, proposed as companies with a public float below $2 billion, would be eligible to follow a simplified regime akin to what is currently available to smaller reporting and emerging growth companies. For larger issuers, the existing rules largely remain unchanged for now, pending additional anticipated rulemaking later this year to streamline the existing Compensation Discussion & Analysis (CD&A) and tabular compensation disclosure requirements.
If approved, the proposal would represent the most significant shift in executive compensation disclosure since the CD&A was introduced in 2006. The proposal’s executive compensation-related changes are focused on substantially scaling back disclosure, including elimination of both the CD&A narrative and advisory “say-on-pay” votes for most U.S. public companies. If adopted as proposed, the SEC anticipates that approximately 80% of current public companies would be eligible for this simplified disclosure regime.
What Compensation Committees Should Consider Now
While the rules, if adopted as proposed, will significantly reduce the volume and complexity of required executive compensation disclosure, the level of information that investors will expect remains an open question. Since the SEC’s June 2025 executive compensation roundtable, there has been significant dialogue advocating for reduced disclosure requirements. However, to date institutional investors have not been vocal participants in that dialogue. We anticipate that many of them, as well as proxy advisory firms, will submit comments during the now-open comment period through July 20, 2026.
As we wait to see what transpires, the committees of smaller public companies would be well-served to begin considering the strategic decisions they may face if disclosure becomes a matter of private ordering, including:
- Whether to voluntarily maintain “say-on-pay” to gauge investor sentiment? As is the case currently for companies who do not hold annual say-on-pay votes, the absence of say-on-pay is likely to lead investors to vote against compensation committee members when they have significant compensation concerns, which is a binding and therefore a more consequential vote.
Whether scaled disclosure will meet investors’ expectations? We anticipate institutional investors and their advisors will continue to emphasize transparency, pay-for-performance alignment and board accountability in their voting and capital allocation decisions. Accordingly, companies that today are subject to full scale disclosure may choose to retain certain disclosure elements, particularly those such as the CD&A that are beneficial to evidencing pay-for-performance alignment.
Key Elements of the Proposal
Looking Ahead
Consistent with prior remarks, in announcing these proposed changes, SEC Chair Paul Atkins indicated this proposal is an initial step in broader disclosure reform. We continue to anticipate additional forthcoming rule proposals that will refine the disclosure obligations for larger public companies, including:
- Reductions to the number of executives for whom disclosure is required
- Simplification of the pay-versus-performance disclosure requirements
- Revisions to compensation tables to more succinctly address compensation awarded and earned during the year
- Revisions to the perquisite disclosure requirements
Need Assistance?
Compensia has extensive experience in helping companies establish executive compensation programs and practices and developing disclosure of such practices in their proxy materials taking into consideration SEC disclosure requirements, proxy advisor policies and investor expectations. If you would like assistance with or if you have any questions on the subjects addressed in this Thoughtful Disclosure Alert, please contact your regular Compensia team members or the authors of this Alert:
