Observations From S&P 500 Pay Versus Performance Disclosures

FW Cook reviewed the S&P 500 companies that filed 2023 proxy statements as of June 1, 2023 (n=403 companies) to analyze the new SEC Pay Versus Performance (PVP) requirements. Key findings include:

• The top three most common financial performance measures that companies chose as their Company Selected Measure (CSM) were profit (56%), revenue (17%), and returns (12%)
• Majority of companies included profit (88%), TSR (55%), and revenue (51%) in their Tabular List and only 21% of companies included non-financial performance measures
• Most companies (76%) used their 10-K published industry or line-of-business index as their total shareholder return (TSR) peer group
• Despite three financial performance measures being the minimum requirement, most companies included additional financial performance measures
• Most companies (91%) used graphs/charts as the clear description requirement, and the remaining 9% used a narrative only description