What to Expect in 2026: Anticipated Changes to Executive Compensation Disclosure After the SEC Chairman’s NYSE Speech

For the first time in nearly two decades, the SEC is preparing to modernize Item 402 of Regulation S-K, the backbone of public-company executive compensation disclosure. Although the timing remains uncertain, we expect proposed reforms to emerge in 2026, setting the stage for the most significant shift in pay disclosure since 2006.

Recent public remarks—including Chairman Paul Atkins’s December 2025 address at the New York Stock Exchange[1]—indicate a strong shift toward re-centering the SEC’s executive compensation disclosure regime on financial materiality, scalable requirements for smaller and newly public issuers, and avoidance of what Chairman Atkins described as an “avalanche of trivial information.”[2] These remarks reinforce that any modernization of Item 402 is likely to emphasize clarity, decision-useful disclosures, and proportional compliance burdens.

Messaging from the SEC over the past year similarly signals an intent to revise the disclosure rules to reduce unnecessary complexity and restore focus on information a reasonable investor would consider important. Anticipated changes are likely to focus on the Compensation Discussion and Analysis (CD&A), the Summary Compensation Table (SCT), and related tabular disclosures, while shifting toward a more principles-based regime that clearly links intended pay opportunities with realized executive outcomes.

1. Recentering on Materiality and Scaling Disclosure for Size and Maturity

SEC leadership has emphasized that materiality—not volume—should be the “north star” of the executive compensation disclosure regime.[3] The current system often results in lengthy, highly technical disclosures that impose disproportionate burdens on smaller issuers while providing limited incremental value to investors.

In practice, we expect reforms to:

• streamline or eliminate immaterial narrative disclosures;
• consolidate overlapping tables;
• expand the IPO onramp for emerging growth companies; and
• reevaluate public-float thresholds that subject smaller issuers to large-issuer disclosure obligations.

Companies with modest public floats or early-stage reporting histories may benefit from scaled requirements that reduce friction during the transition to public-company reporting.

2. A More Principles-Based, Materiality-Driven CD&A

The CD&A was originally intended to explain how and why compensation decisions were made and how those decisions aligned with performance. Over time, successive layers of rulemaking and growing compliance demands have caused many CD&As to balloon into lengthy, formulaic disclosures, often driven more by the need to satisfy technical disclosure requirements than by the goal of providing investors with information useful in the decision-making process.

Against this backdrop, we expect the forthcoming revisions will likely recenter the CD&A on storytelling and strategy, one that highlights the compensation committee’s objectives, its evaluation of performance, and how compensation outcomes supported corporate strategy and value creation. Rather than repeating tabular information, companies should prepare for heightened expectations around plain-English explanations of key decisions.

We expect forthcoming reforms to:

• encourage clearer articulation of compensation philosophy and performance evaluation;
• reduce duplicative narrative reflecting tabular information;
• shift focus toward the committee’s objectives and strategic rationale; and
• emphasize plain-English explanation rather than formulaic detail.

Taken together, these developments suggest that the CD&A will evolve into a more streamlined, materially focused narrative.

3. Rethinking the Tables: Clarity Without Overload

A key question is whether the SCT will survive in its current form. Many expect that it will evolve into a “target versus realized pay” presentation, one that contrasts intended compensation opportunities with compensation actually earned, while others expect a hybrid model that places target opportunities and realized results side by side, effectively merging the SCT with elements of the Pay-Versus-Performance (PVP) disclosures. In either case, reform is expected to transform the tables into more decision-useful dashboards rather than static compliance exhibits, better aligning narrative and quantitative disclosures to show how pay intent translated into outcomes.

The SEC also appears to be focused on making executive pay disclosure more intuitive and comparable across issuers. This may include encouraging companies to provide a lifecycle view of compensation, showing how intended pay opportunities evolve from grant to vesting to realized value, and revisiting the equity award tables to capture that progression.

If implemented as anticipated, these revisions would mark a fundamental modernization of the executive compensation disclosure regime, shifting it from a compliance exercise to a communication tool intended to demonstrate pay-for-performance alignment in a way that is both accessible and analytically robust.

Potential revisions may include:

• combining target opportunities and realized outcomes into integrated presentations;
• reducing duplicative tables;
• encouraging lifecycle views of equity awards; and
• improving clarity around intended versus realized pay outcomes.

If implemented, these changes would modernize the executive compensation disclosure framework, transforming it from a compliance exercise into a communication tool that more clearly demonstrates pay-for-performance alignment.

4. Perquisites Remain a Flashpoint

Perquisite disclosure is expected to remain an area of SEC focus. Rather than adopting new quantitative thresholds, we expect that the Commission may issue clarifying guidance to better distinguish business versus personal benefits and to highlight the importance of contemporaneous board approval and well-documented oversight.

Companies should continue to:

• formalize internal approval processes;
• document business purposes for high-value or mixed-use arrangements;
• maintain clear and consistently applied classification standards; and
• coordinate early with disclosure counsel when preparing proxy materials.

5. The CEO Pay Ratio

Because the CEO pay-ratio rule is statutory, repeal is unlikely. However, the SEC may consider refinements that make the disclosure more meaningful to investors and less prone to the unintended effects highlighted in recent public remarks. For instance, some have argued that the mandated disclosures may unintentionally fuel benchmarking and “ratcheting,” where companies adjust CEO pay upward to keep pace with peers regardless of performance, and may also shift attention toward comparisons that feel punitive or shaming rather than providing investors with insight into compensation philosophy or company-specific context.[4]

To address these concerns while maintaining statutory compliance, potential reforms may include:

• streamlining methodologies;

• expanding sampling flexibility;
• incorporating the ratio into revised compensation tables to reduce repetition; or
• presenting the ratio on a year-over-year basis to provide investors with trend information rather than a single data point.

6. What Boards and Counsel Should Do Now

Although any new SEC rulemaking will not affect 2026 proxy filings, boards and compensation committees can prepare now by:

• Reassessing narrative clarity: Ensure CD&A narrative explains why executives earned what they earned, how decisions aligned with strategy, and how the committee evaluated performance.
• Strengthening perquisite governance: Formalize approval processes for executive travel, security, and other mixed-use benefits, and document the business rationale contemporaneously. Tighten policies and maintain written logs defining boundaries between business and personal use (e.g., aircraft, executive security, club memberships, etc.). Advance approvals and consistent disclosure demonstrate strong governance discipline, reducing the risk of SEC scrutiny and shareholder criticism.
• Enhancing governance and disclosure coordination: Ensure alignment among management, the compensation committee, finance, and disclosure counsel through structured internal review protocols. Establish a cross-functional “disclosure alignment” review before filing. This not only improves accuracy and coherence for the upcoming 2026 proxy season but also positions the company to meet the integrated, narrative-plus-data approach expected under upcoming SEC reforms.

The Bottom Line

The SEC’s long-anticipated modernization of executive compensation disclosure is coming and is expected to reflect a broader desire to anchor disclosure in financial materiality, reduce information overload, and scale compliance for smaller and newly public companies. In the meantime, boards should focus on readiness, strengthening governance, ensuring well-documented decision-making, and maintaining clear alignment between pay and performance. Doing so will not only ease the transition to any new rules but also strengthen credibility under the current regime.

[1] Paul S. Atkins, Chairman, U.S. Sec. & Exch. Comm’n, Remarks at the New York Stock Exchange, “Revitalizing America’s Markets at 250” (Dec. 2, 2025).

[2] Id. (quoting Thurgood Marshall, TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 448–449 (1976)).

[3] See Atkins, supra note 1.

[4] Paul S. Atkins, Chairman, U.S. Sec. & Exch. Comm’n, Remarks at the New York Stock Exchange, “Revitalizing America’s Markets at 250” (Dec. 2, 2025). (quoting Warren Buffett, see Berkshire Hathaway Inc. (Nov. 10, 2025).