SEC amendments to company filer statuses would reduce executive pay disclosure
SEC’s proposed overhaul of public company filer statuses would reduce executive pay disclosure for all new and most current filers
As part of its efforts to simplify US public company reporting and disclosure requirements, the Securities and Exchange Commission (SEC) proposed sweeping amendments to its public company reporting framework on May 19. The changes include significant reductions to required executive pay disclosure for most public companies. Only large accelerated filers (LAFs), which are defined as those with public float of $2 billion or more, would still be required to comply with the current rules. All other companies (approximately 80% of current public companies) and, for at least a five-year period after going public, newly public companies would be categorized as non-accelerated filers (NAFs). NAFs would be able to take advantage of scaled disclosure rules that currently apply only to emerging growth companies (EGCs) and smaller reporting companies (SRCs). A subcategory of small NAFs with total assets of $35 million or less (SNFs) would receive additional accommodations.
This article summarizes how executive pay disclosure would be scaled for NAFs (including SNFs). For example, they wouldn’t have to hold say-on-pay (SOP) votes, provide a compensation discussion and analysis (CD&A), or produce pay-versus-performance (PVP) or CEO pay ratio disclosures. They also would have fewer named executive officers (NEOs), fewer years of pay in the Summary Compensation Table (SCT) and fewer tabular disclosures. Highlights of the proposed amendments are discussed in the SEC’s fact sheet.
NAFs and SNFs will likely welcome the reduced compliance obligations and costs, and scaled disclosure could help the SEC achieve its stated goal of making it easier for companies to go and stay public. But the changes would also significantly reduce the information available for benchmarking pay and for investors making investment decisions. Also, without a SOP vote, investors may vote against directors if they object to a company’s pay program.
Comments on the proposal are due July 20, 2026. The SEC will review the comments before issuing a final rule (which may differ from the proposal). During this period, companies weighing the pros and cons of going or staying public should factor in the reduced obligations and cost, and current filers should determine their status under the proposal and the potential impact on future pay disclosure and governance.
Highlights
The current filer and reporting framework divides public companies into five partially overlapping categories based on public float and/or revenue — LAFs, accelerated filers, NAFs, EGCs and SRCs. The proposed amendments would:
• Reduce the number of categories to three — LAFs, NAFs and SNFs
• Narrow the universe of filers subject to the current reporting standards to LAFs
• Raise the public float threshold to qualify as an LAF from $700 million to $2 billion (see “Determining filer status” below)
• Eliminate the accelerated filer and SRC categories, so all companies that aren’t LAFs would be NAFs (the EGC category would be retained but most of the benefits of EGC status would be available to all NAFs)
• Consider newly public companies to be NAFs and give them 60 consecutive calendar months (i.e., five years) before they could become LAFs even if they meet the $2 billion LAF public float threshold
• Allow NAFs to take advantage of certain accommodations currently applicable to EGCs and SRCs, including:
- Providing fewer years of financial statements
- Relief from having to obtain an auditor’s attestation on internal controls over financial reporting
- Scaled disclosure eligibility
- See “Scaled executive compensation disclosure” below for more information.
• Give SNFs (NAFs with total assets of $35 million or less) additional time to file Forms 10-K and 10.
The new definitions wouldn’t apply to foreign private issuers that elect to file on Forms 20-F and 40-F as those forms have their own disclosure accommodations.
is a Partner and Senior Legal Consultant in Mercer's Law & Regulatory Group (L&R) based in New York. She specializes in technical legal and regulatory issues affecting executive compensation and corporate governance. She focuses on SEC disclosure, tax, employment and change in control agreements, equity programs, and employee benefit issues that arise in the context of corporate transactions and initial public offerings.
is a Senior Legal Consultant in Mercer's Law & Regulatory Group (L&R) based in Washington DC. She provides expert analyses on a variety of US and Canadian compliance and policy matters, and advises clients on securities and corporate governance issues affecting executive pay in North America.