Pay for top executives at US companies is about to get a lot more scrutiny under a new Securities and Exchange Commission rule, Bloomberg News reported. Publicly traded firms will have to disclose more details about how senior managers are paid, including performance incentives, the SEC said on Thursday. The rule, which has been delayed for years, aims to clarify how a company’s financial performance impacts an executive’s pay, according to the agency. Shareholder advocates have for years sought greater disclosure around executive pay, arguing that it should correspond to how well a firm is performing financially. Current disclosures, they say, don’t provide enough detail for investors about the incentives that often make up a large chunk of top managers’ overall compensation. In one key change, companies will have to start detailing the link between executive compensation and the returns that their investors, and competitors’ shareholders make from holding stock. The metric, known as total shareholder return, would help investors determine a company’s performance, the SEC said.
