What To Expect In 2026 Anticipated Changes To Executive Compensation

Bonisiwe Shabane

-Dec 26, 2025, 9:44 PM

What to Expect in 2026: Anticipated Changes to Executive Compensation Disclosure After the SEC Chairman’s NYSE Speech For the first time in nearly two decades, the SEC is preparing to modernize Item 402 of Regulation S-K, the backbone of public-company executive compensation disclosure. Although the timing remains uncertain, we expect proposed reforms to emerge in 2026, setting the stage for the most significant shift in pay disclosure since 2006. Recent public remarks—including Chairman Paul Atkins’s December 2025 address at the New York Stock Exchange[1]—indicate a strong shift toward re-centering the SEC’s executive compensation disclosure regime on financial materiality, scalable requirements for smaller and... Messaging from the SEC over the past year similarly signals an intent to revise the disclosure rules to reduce unnecessary complexity and restore focus on information a reasonable investor would consider important. Anticipated changes are likely to focus on the Compensation Discussion and Analysis (CD&A), the Summary Compensation Table (SCT), and related tabular disclosures, while shifting toward a more principles-based regime that clearly links intended pay...

SEC leadership has emphasized that materiality—not volume—should be the “north star” of the executive compensation disclosure regime.[3] The current system often results in lengthy, highly technical disclosures that impose disproportionate burdens on smaller issuers... Lane Ringlee is a Managing Partner and Steve DeMaria is a Consultant at Pay Governance LLC. This post is based on their Pay Governance memorandum. Our firm’s partners and consulting staff have participated in more than 250 board compensation committee meetings in the first half of 2025. Through these engagements and internal firm collaboration, we have identified several key issues gaining prominence in boardroom discussions. These key developments, in no particular order, include:

2. Potential Impact of Tariffs on Incentive Plans 3. One Big Beautiful Bill Act – Proposed Impact on Executive Pay 4. Navigating Shifting Pressures on ESG and DEI Goals

A “Measured but Competitive” Year for Executive Pay Executive compensation in 2026 is being shaped by two opposing forces: boards face intense scrutiny on pay and inequality, yet they still operate in a global talent market where top leaders remain scarce and... Surveys of compensation committees and HR leaders indicate a deliberate shift to “measured but competitive” pay strategies—moderating fixed pay growth while preserving upside through equity and performance-based incentives. Median salary increase projections have edged down as inflation cools and labor markets soften, but equity-based awards and long-term incentives remain robust, particularly in US and global large-cap companies. The result is a compensation environment where headline cash increases look restrained while total realizable pay can still expand meaningfully if performance and markets cooperate. Base Salary Trends: Moderation at the Top

Across industries, most organizations still expect to provide base salary increases for executives in 2026, but the size of those increases is drifting lower than in the immediate post-pandemic years. Pearl Meyer’s 2026 outlook suggests median salary increase percentages around 3% for both CEOs and broad-based employees, with CEO direct reports slightly higher at roughly 3.4%. These projected increases are modestly below recent actuals, reflecting lower inflation and a marginally less tight labor market. Timely data from 248 companies on how organizations of all sizes and ownership types are approaching executive compensation pay practices for 2026. Pearl Meyer’s “Looking Ahead to Executive Pay Practices” is an annual, online survey and valuable compensation planning tool. This year’s plan design survey was conducted in August and September of 2025, with total participation from 248 companies, including 121 publicly traded, 84 private for-profit, and 43 not-for-profit (NFP) organizations.

As with prior surveys, responses are broken out separately by respondent type (employee vs. board member), ownership type, industry, and company size. This year’s survey addresses key topics associated with the current environment, including the anticipated impact of tariffs and other macroeconomic factors on company performance and executive compensation and actions taken in response, CEO turnover... As with prior surveys, it also addresses compensation philosophy, compensation/human capital committee oversight, recent or anticipated changes to incentive plan designs, projected base salary increases for 2026, expected payouts for short-term incentive (STI) and... This year’s survey also asks respondents to identify primary executive compensation program objectives and their organization’s perceived effectiveness in achieving them. 2026 Proxy Season: A Look Ahead to Executive Compensation Issues and Considerations

As the 2026 proxy season approaches, public companies and their boards are navigating a rapidly evolving executive compensation landscape. Amidst new regulatory scrutiny, shifting investor expectations, and ongoing debate over performance metrics and disclosure practices, early preparation is crucial to mitigate potential challenges and proactively manage compensation matters through effective proxy disclosures, well-executed... This alert outlines key considerations for public companies and their compensation committees as they prepare for the 2026 proxy season and related compensation decisions. Emerging growth companies (EGCs) and smaller reporting companies (SRCs) should note that some of the rules and issues discussed here may not apply, and we encourage them to contact their Winston & Strawn team... Companies generally had positive say-on-pay results, with 99% of proposals passing for companies in both the S&P 500 and the Russell 3000 in early 2025. Nonetheless, while failed say-on-pay results have remained infrequent, certain actions by compensation committees contributed to negative recommendations from Institutional Shareholder Services (ISS) and lower voting results for some proposals.

A subset of companies fell below the key 70% threshold for ISS, which typically triggers heightened scrutiny of company responsiveness in the following year’s proxy statement. (Glass Lewis applies an 80% threshold for similar purposes.) Companies that received lower say-on-pay voting results in 2025 should consider steps that can be taken now to address relevant issues for the upcoming proxy season, including a game plan for shareholder engagement as... Executive compensation is evolving at a pace never seen before in the business world. As companies navigate economic uncertainties, technological advancements, and shifting workforce expectations, how executives are compensated is undergoing significant transformations. In this blog, we’ll explore the emerging trends in executive compensation and what organizations and executives can expect in the future.

Before diving into future predictions, it’s essential to understand the current state of executive compensation. Traditionally, executive pay has been composed of several key components: base salary, bonuses, stock options, and other long-term incentives. This structure has remained relatively consistent over the years, with variations depending on industry, company size, and executive level. However, the global pandemic, economic volatility, and increased focus on social issues have forced companies to rethink their compensation strategies. The traditional approach is no longer sufficient to attract and retain top talent, especially in a competitive market like New York. This is where New York executive recruiters come into play, helping organizations find the right compensation mix to attract top-tier talent.

As we look to the future, several trends are emerging in executive compensation. These trends reflect the changing priorities of both organizations and executives, driven by economic pressures, technological advancements, and evolving societal expectations. As we approach 2026, European companies are facing challenges in designing and implementing effective executive compensation strategies. The global business environment is characterized by increasing volatility, technological disruption, and evolving stakeholder expectations. Recent insights from our recent ECBA Europe Webcast provide valuable perspectives on these challenges and opportunities. A growing minority of European companies are making bold adjustments to their executive pay arrangements to remain competitive with global peers, particularly those based in the U.S..

This shift is driven by the need to attract and retain top talent in a globally competitive market. The changes these companies are making tend to centre on meaningful increases to overall remuneration quantum, usually by raising long-term incentive (LTI) opportunities, In fact, over 70% of companies making bold changes have increased... In parallel, an influential minority of these companies are radically revising their approach to LTI design, in many cases introducing hybrid plans that combine performance shares and restricted shares. Over 70% of companies making bold changes have increased LTI opportunities These bold changes are not without scrutiny. Investors and proxy advisors are closely examining them, particularly when they harbour concerns that substantial increases in pay may occur without corresponding performance improvements.

To win investor and proxy support for bold policy proposals, companies have had to improve their articulation of the business case for change and the quality and intensity of their engagement with investors. Companies’ need for greater global competitiveness is therefore driving up investor expectations around the appropriate degree of transparency regarding the rationale for adopting a given pay policy and the relationship between pay and performance. The current high degree of global economic uncertainty, stemming in large part from geopolitical developments and accelerating technological change, is making performance assessment for pay purposes increasingly complex. Companies are struggling to align pay with performance on a formulaic basis, increasing the role of derogation clauses, discretionary powers, and one-off awards in adapting the implementation of remuneration policies to exceptional circumstances. For the first time in nearly two decades, the SEC is preparing to modernize Item 402 of Regulation S-K, the backbone of public-company executive compensation disclosure. Although the timing remains uncertain, we expect proposed reforms to emerge in 2026, setting the stage for the most significant shift in pay disclosure since 2006.

Recent public remarks—including Chairman Paul Atkins’s December 2025 address at the New York Stock Exchange[1]—indicate a strong shift toward re-centering the SEC’s executive compensation disclosure regime on financial materiality, scalable requirements for smaller and... READ MORE

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