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SEC proposes new rules on CEO pay, performance

Public companies in the United States would be required to disclose how the pay of their top executives squares with their overall performance under new rules slated to be proposed on Wednesday.

The draft measures by the U.S. Securities and Exchange Commission will likely spark debate among labor groups, which typically support such disclosures, and trade groups such as the U.S. Chamber of Commerce, which are often critical of them.

The proposal calls for companies to provide a table in their proxy statements that contains the total compensation paid to their principal executive, the total shareholder return on an annual basis, and the shareholder return on an annual basis of peer group companies, among other things.

The SEC's plan is part of a package of executive compensation disclosures required by the 2010 Dodd-Frank Wall Street reform law.

The agency previously proposed several other measures related to compensation disclosures.

Although some of them have managed to get adopted, such as rules that require shareholder votes on executive pay and "golden parachute" compensation packages, others have remained marred in controversy.

One rule that has yet to be adopted, for instance, calls for companies to disclose the ratio between the chief executive's compensation and the median total compensation for all other employees.

Organized labor groups such as the AFL-CIO strongly support the CEO pay ratio rule, but Republicans and the U.S. Chamber of Commerce have staunchly opposed it.