The U.S Securities and Exchange Commission has approved the biggest overhaul of executive-compensation rules in 14 years, including a requirement that public companies lay out information about the timing of stock-option grants to their top officers.
Under the new SEC rules, companies are required to publish a table showing executives' total compensation.
And, as questions continue to swirl about companies' timing of stock-option grants, firms will also be required to show the dates those options were granted, and provide other options-related information.
"I would say this is going to revolutionize executive compensation," said Mark Poerio, the co-chair of the global executive compensation practice at Paul, Hastings.
Companies will have to make sure their top officers' pay is reasonable and justifiable, he said.
The options measure comes as federal investigators continue to probe companies in connection with timing of options grants.
The U.S Justice Department has announced the first criminal case in connection with so-called backdating of stock options, charging two former Brocade Communications Systems Inc executives.
SEC chairman Christopher Cox has said that options are a legitimate form of compensation but that investors need a clear picture of executives' pay.
Commissioners also voted to take another look at a rule about disclosure of the pay of highly compensated non-executives.
The SEC would exempt from scrutiny the pay and perks of employees who have no responsibility for major policy decisions within the company.
