Insight's August 2023 issue features our Viewpoint, "Demonstrating Pay and Performance Alignment: A Comparison of Compensation Actually Paid and Realizable Pay", by Ira Kay, Mike Kesner, Linda Pappas and Ed Sim.

The pay versus performance (PVP) disclosure requirement from the Dodd-Frank Act of 2010 evolved from the belief of a limited relationship between executive pay and shareholder performance which, in turn, had become a significant corporate governance issue. This belief was documented by the Securities Exchange Commission (SEC) in the PVP final rule, which cited the legislative history of the new disclosure requirement:

…the relationship between executive pay and performance has become a ‘significant concern of shareholders,’ and that the required disclosure should ‘add to corporate responsibility,’ as registrants will be required to provide clearer executive pay disclosures.

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