Under a new Securities and Exchange Commission (SEC) rule, public companies have to reveal how much compensation their CEOs will receive.
The so-called "compensation actually paid" rule, which reflects the shifting value of stock options and restricted stock payouts, provides a more accurate assessment of what corporate executives take home annually.
The previous executive-pay disclosure rule only required companies to reveal how much executive stock payouts were worth at the time they received them.
- Starting in December 2022, publicly-traded companies must reveal the "compensation actually paid" amount for the most recent three years.
- At least 65 companies have already complied with the rule, including 23 S&P 500 companies.
- Some CEOs have seen their pay jump dramatically due to rising stock prices.
- Olivier Le Peuch, CEO of oil-field services firm Schlumberger, received $24M more in the last fiscal year than he did in the previous year due to the dramatic rise in the price of Schlumberger stock.
- Others, like nuts-and-bolts maker Fastenal CEO Daniel Florness, saw their equity pay drop by nearly half after the company's stock fell.
The new reporting rule can also reveal the gap between the reported number in the old metrics and the actual take-home compensation for CEOs.
- Michael Hsu, CEO of Huggies diapers maker Kimberly-Clark, was paid a total of $23.4M when the old metric would have only shown $14.6M in compensation.
