SEC Proposes Changes to Compensation Disclosures for Companies with a Public Float of Less than $2 Billion

On May 19, 2026, the Securities and Exchange Commission proposed amendments intended to simplify the public company reporting framework and expand disclosure accommodations to a broader group of public companies. The proposal would modify filer categories, extend filing deadlines for certain smaller issuers, and make scaled disclosure provisions available to additional companies.

The proposal would simplify current filer classifications by grouping all public companies into two buckets: large accelerated filers (LAFs), where the threshold was raised from $700 million to $2 billion in public float, and non-accelerated filers (NAFs), including all other public companies that do not meet the LAF threshold. This eliminates the need for the non-accelerated, smaller reporting company, and emerging growth company categories. There is also proposed to be a new small non-accelerated filer category within the NAF category for issuers with assets of $35 million or less. Based on data provided by the SEC, about 35% of current public companies are LAFs, whereas under the proposed regime, about 19% of companies will fall into this category.

A company would need to satisfy the LAF threshold for two consecutive years to come in or out of LAF status, and this would be measured based on the average stock price over the last 10 trading days of the second quarter (rather than the last trading day of the second quarter, as is currently the case). Finally, a newly public company would retain NAF status for a minimum of 5 years before entering LAF status, regardless of its public float.

Among the more notable changes for compensation and governance professionals, the proposal would extend to all NAFs disclosure accommodations that are currently limited to smaller reporting companies and emerging growth companies. The SEC indicates these accommodations would include scaled executive compensation disclosure requirements consistent with those currently available for emerging growth companies:

Scaled executive compensation disclosures for NAFs

• Disclosure for 3 NEOs (instead of 5)
• Only required executive compensation tables are Summary Compensation Table (with 2 years of information instead of 3) and Outstanding Equity Awards Table
• No CD&A
• No CEO Pay Ratio
• No Pay Versus Performance

No Dodd Frank Advisory votes for NAFs

• No Say on Pay / No Say When on Pay / No Say on Golden Parachute

NAFs could also provide fewer years of financial statements (2 instead of 3) with reduced presentation requirements, and would not be required to obtain an auditor’s attestation on internal control over financial reporting.

Public companies, compensation committees, and internal legal and finance teams should monitor these developments closely. If adopted, the changes would affect executive compensation disclosure strategy, proxy preparation processes, and compliance planning for a significant number of issuers. The proposal would give management teams and compensation committees more discretion over how much of the existing compensation narrative to retain voluntarily. Companies that become newly eligible for scaled disclosure may want to assess, before the next proxy drafting cycle, which disclosures are legally required, which remain useful to investors, and where a shorter presentation could unintentionally remove context from the compensation story.

The SEC’s public comment period will remain open until July 20, 2026.