On May 19, 2026, the SEC issued Release No. 33‑11419, proposing a fundamental shift in the public company reporting framework. While the focus of the Release is on capital markets access and filer status simplification, the proposal’s disclosure accommodations would significantly reduce executive compensation disclosure requirements for many U.S. public companies.
If adopted, scaled executive compensation disclosure requirements would apply to all non‑accelerated filers—an expanded category that would include approximately 80% of current public companies. All newly public companies would initially qualify as non-accelerated filers and, under the proposal, would not be considered large accelerated filers (and therefore would not be subject to full disclosure requirements) regardless of their public float until they have at least 60 months of reporting history.
As a result, for many issuers—and for all newly public companies during at least their first five years as reporting companies—the SEC is proposing to replace today’s detailed and extensive executive compensation disclosure regime with a significantly scaled‑back framework.
The proposal comes as the SEC continues its broader executive compensation disclosure reform initiative following its roundtable on executive compensation disclosure on June 26, 2025. While separate Reg S-K Item 402 rulemaking is expected, this release may provide an early indication of how the SEC may approach that rulemaking.
This update highlights the key proposed executive compensation changes. For a broader discussion of the full scope of the rule and form amendments proposed by Release No. 33-11419, please refer to our Capital Markets alert.
What is a “Non‑Accelerated Filer”?
Under the proposal, a non-accelerated filer is any issuer that is not a large accelerated filer. In general, under the proposal:
- A large accelerated filer (“LAF”) is a seasoned issuer with a public float of $2 billion or more.
- A non‑accelerated filer (“NAF”) is a company with a public float below $2 billion and/or a company that has been a reporting company for less than 60 months.
Proposed Executive Compensation Changes
Observing that it has not identified significant investor concern with the scaled executive compensation disclosures currently available to smaller reporting companies and emerging growth companies, the SEC proposes to extend those disclosure accommodations to all NAFs. As a result, for all NAFs:
- Item 402 executive compensation disclosure would generally be limited to three named executive officers (“NEOs”) (reduced from five);1
- Summary Compensation Table disclosure would be limited to two years (reduced from three);
- Multiple compensation tables and disclosure requirements would be eliminated, including:
- the Compensation Discussion & Analysis (CD&A) and the related compensation committee report;
- the Grants of Plan‑Based Awards Table;
- the Option Exercises and Stock Vested Table;
- the Pension Benefits Table;
- the Nonqualified Deferred Compensation Table;
- CEO pay ratio disclosure;
- pay versus performance disclosure;
- compensation‑related risk disclosure; and
- The requirement to hold shareholder advisory votes on executive compensation, including say‑on‑pay, say‑on‑frequency and say‑on‑golden‑parachute votes, and related golden parachute disclosure in connection with mergers and acquisitions, would not apply.
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1Consistent with the current NEO framework for smaller reporting companies, the NEOs for NAFs would include all individuals serving as the CEO and the company’s two other most highly compensated executive officers serving at the end of the last completed fiscal year, as well as up to two additional individuals who would have been NEOs but for the fact that they were not serving as executive officers at the end of the fiscal year.
Status of Proposal
These and the other proposed public company reporting reforms are subject to public comment, with a 60‑day comment period scheduled to run until July 20, 2026.
Takeaways
- The proposal raises practical questions around disclosure strategy. If the CD&A is no longer required for most issuers, companies in the NAF category may need to consider whether and what to disclose voluntarily to address investor expectations and governance considerations.
- Potential unintended consequences around proxy voting. If the shareholder advisory votes on executive pay are no longer applicable to most issuers, it may cause investors and proxy advisors to signal any discontent with a company’s executive compensation program by targeting the voting for directors, particularly members of the company’s compensation committee.
- The proposal may signal where the SEC is heading on broader executive compensation reform. The SEC’s willingness to substantially scale executive compensation disclosure requirements for most issuers may foreshadow elements of its forthcoming rulemaking in this area—raising the question of whether aspects of a simplified framework could ultimately extend, in some form, to larger issuers.
- Now is the time to engage. Given the potential for meaningful change and a reduction in their overall disclosure compliance burden, issuers may want to consider submitting comments to the SEC during the comment period.
For specific advice on how these proposals may affect your compensation program and related disclosures, please contact your Baker McKenzie relationship partner or any member of our Compensation team.
