The SEC has tightened the requirements for reporting companies on payments to top managers
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On Thursday, the U.S. Securities and Exchange Commission (SEC) new rulestightening reporting requirements for public companies to shareholders. Organizations will need to provide them with more information about how executive compensation compares to the company’s financial results.
The requirement to report to shareholders on such a ratio (pay versus performance) and to hold a vote of shareholders on remuneration of top managers has been in force since 2010. Companies must now provide more details, such as how performance bonuses, which in fact form the bulk of executive compensation, are calculated. “The rule adopted today makes it easier for shareholders to have access to the decision-making process on the issue of compensation to top managers in public companies,” said SEC Chairman Gary Gensler.
Recently, shareholders have increasingly expressed dissatisfaction with the size of payments to company management. How wrote in May The Wall Street Journalin two dozen American companies from the S & P 500, including JPMorgan Chase, Intel and Coca-Cola, many shareholders this year opposed what they consider to be too high payments to top managers.
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