SEC Proposes Sweeping Reforms to Executive Compensation Disclosure Requirements for Public Companies

On May 19, 2026, the Securities and Exchange Commission (SEC) published proposed Release No. 33-11419 (the Proposed Rules), which represents the most significant overhaul of the public company reporting and capital-raising framework in 20 years. The Proposed Rules, in part, extend the reduced compensation disclosure obligations currently reserved for emerging growth companies (EGCs) and smaller reporting companies (SRCs) to a significantly broader set of public companies (including all newly public companies).

Currently, public companies are classified into five filer status categories: large accelerated filers (LAFs), accelerated filers (AFs), non-accelerated filers (NAFs), SRCs, and EGCs. Each category is subject to different disclosure requirements, filing deadlines, and regulatory accommodations. The Proposed Rules would streamline this framework by consolidating filer status into two categories: LAFs and NAFs, plus a new subcategory of small non-accelerated filers (SNFs).The AF and SRC categories would be eliminated while most EGC accommodations would be extended to all NAFs, making reliance on EGC status largely redundant for practical purposes, though EGCs will remain a statutory category with certain unique accommodations. SNFs would be a subset of NAFs with total assets of $35 million or less as of the end of each of their two most recent second fiscal quarters.

Under the Proposed Rules, companies with $2 billion in public float and 60 consecutive months of reporting history would qualify as LAFs (compared to the current thresholds of $700 million in public float and 12 consecutive months of reporting history). The public float threshold would be calculated based on the average stock price over the last 10 trading days of the second fiscal quarter and must be met at the end of each of two consecutive years. Accordingly, for a registrant to change filer status from NAF to LAF (or vice versa), the public float threshold would need to be met (or not met) for two consecutive years, upon or following 60 consecutive months of reporting history.

The Proposed Rules would impact all public companies but would most significantly affect companies currently classified as LAFs, AFs, or SRCs that would be reclassified as NAFs under the new $2 billion public float test.

An additional result of the Proposed Rules is that any newly IPO’d company would be classified as an NAF for at least five years, regardless of company size. Companies that have gone public prior to the effectiveness of the Proposed Rules would similarly benefit from the seasoning threshold for the remainder of that five-year period.

The Proposed Rules are open to public comment through July 20, 2026.

Impact on Executive Compensation Disclosure Under Item 402 of Regulation S-K

By extending scaled disclosure accommodations currently available only to SRCs and/or EGCs to all NAFs, the Proposed Rules would significantly simplify and reduce executive compensation disclosure obligations for many public companies, while still maintaining the current disclosure framework for the largest and most established issuers qualifying as LAFs, as detailed below.

Streamlined Executive Compensation Disclosure Obligations for NAFs

All NAFs would be eligible for scaled executive compensation disclosure under Item 402 of Regulation S-K, akin to the disclosure requirements currently applicable to SRCs and/or EGCs. The Proposed Rules would also exempt all NAFs from the shareholder advisory vote requirements currently imposed by Rule 14a-21 of the Securities Exchange Act of 1934 and certain compensation committee-related disclosure under Item 407 of Regulation S-K.

These changes mean that NAFs would be permitted to:

• Include only three named executive officers (NEOs). NAFs would only be required to disclose executive compensation for three NEOs in their Item 402 compensation disclosure, rather than the five NEOs currently required for companies that do not qualify as EGCs or SRCs. Specifically, the required NEOs would be anyone who served as principal executive officer (PEO) during the fiscal year and the next two most highly compensated executive officers serving at fiscal year-end, plus up to two additional individuals who would have been among the two most highly compensated executive officers if they had still been serving at fiscal year-end (as determined under Item 402(m)(2) of Regulation S-K).
• Provide two years of summary compensation table data. NAFs would be required to provide only two years (instead of three years) of information.
• Omit the compensation discussion and analysis (CD&A) and compensation committee report. NAFs would not need to provide the CD&A narrative, which currently requires a comprehensive discussion of the material factors underlying compensation decisions for NEOs, including the rationale, philosophy, and objectives of the company’s compensation program. NAFs also would not be required to include compensation committee interlocks and insider participation disclosure or compensation committee report disclosure.
• Omit say-on-pay and other shareholder advisory votes. NAFs would be exempt from the requirement to include a non-binding shareholder advisory vote to approve the compensation of NEOs (say-on-pay) at least once every three years. NAFs also would be exempt from the requirement to include a non-binding shareholder advisory vote on the frequency of say-on-pay voting at least once every six years, as well as the Item 402 requirement to approve golden parachute compensation arrangements in connection with certain mergers and acquisitions (as well as the related disclosure). Companies would be required to include the say-on-pay and say-on-pay frequency resolutions in connection with the first solicitation after becoming an LAF.
• Omit certain compensation tables and related disclosure. NAFs would not be required to include in their disclosure the grants of plan-based awards table, the option exercises and stock vested table, the pension benefits table, or the non-qualified deferred compensation table. NAFs also would not be required to quantify the estimated payments and benefits that would be provided to NEOs upon a termination and/or a change in control.
• Omit pay versus performance disclosure. NAFs would be exempt from the pay versus performance disclosure requirements under Item 402(v) of Regulation S-K. This is an expansion of the original exemption, which applies only to EGCs, foreign private issuers, and registered investment companies. Under the pay versus performance rules adopted by the SEC in 2022 (Release No. 34-95607), SRCs are currently required to comply with the pay versus performance disclosure requirements, albeit in a scaled format.
• Omit CEO pay ratio disclosure. NAFs would be exempt from the pay ratio disclosure requirement under Item 402(u) of Regulation S-K, which currently requires non-SRC and non-EGC filers to disclose the ratio of the PEO’s annual total compensation to the median of the annual total compensation of all other employees.
• Omit risk management disclosure. NAFs would not be required to provide disclosure regarding compensation policies and practices as they relate to risk management under Item 402(s) of Regulation S-K.
• Streamlined related-party transaction disclosure standard. Currently, SRCs are subject to a more rigorous related-party transaction standard under Item 404(d) of Regulation S-K than LAFs. Because the Proposed Rules would eliminate the SRC category entirely, Item 404(d) apparently would no longer apply to any filer. All companies, whether LAFs or NAFs, would thus be subject to the same related-party transaction disclosure standard under Item 404(a). A description of policies and procedures for review, approval, or ratification of related-party transactions under Item 404(b) would not be required for NAFs.

Transition Provisions

Under the Proposed Rules, existing registrants as of the effective date would need to assess their LAF or NAF status as of the end of the registrant’s fiscal year ending immediately prior to the year in which the final rules take effect. Such determination may be made at any time after effectiveness of the final rules, but no later than the day prior to the last day of the registrant’s fiscal year in which the final rules go into effect. For example, if the final rules become effective on January 15, 2027, calendar-year registrants would need to assess their filer status as of December 31, 2026, no later than December 30, 2027, but could make such assessment as of any date between January 15 and December 30, 2027. If an existing registrant does not make this assessment by the deadline, it would be deemed to be (1) an LAF until the next assessment date, if it was an LAF before the final rules take effect, or (2) an NAF until the next assessment date in all other cases.

Action Items and Considerations for Public Companies

If the Proposed Rules are adopted, public companies will need to consider the following:

• Assess filer status under the Proposed Rules. Companies will want to determine whether they would qualify as LAFs or NAFs under the proposed $2 billion public float threshold and the 60 consecutive months’ reporting history requirement as of the end of their fiscal year immediately preceding the year in which the final rules take effect.
• Evaluate the impact on proxy statement preparation and related disclosure requirements. Companies that expect to transition to NAF status should begin evaluating how the proposed scaled disclosure accommodations would affect their proxy statement preparation processes and compensation planning generally, including the potential elimination of the CD&A, the reduction in the number of NEOs (which will also impact subsequent Form 8-K obligations), the elimination of various compensation tables, and the elimination of the need to hold say-on-pay and say-on-pay frequency votes.
• Consider whether to continue providing non-scaled disclosures voluntarily. Companies that qualify as NAFs may still choose to continue providing non-scaled disclosure voluntarily. Companies should consider how moving to scaled disclosure would affect investor relations and shareholder engagement practices.

For more information on the Proposed Rules, see this Latham blog post.

Summary: LAF vs. NAF Executive Compensation Disclosure Comparison