Rightsizing the Number of NEOs: Why Less is More

This position paper proposes a modernization of the SEC’s executive compensation disclosure requirements by limiting the number of Named Executive Officers (NEOs) disclosed in proxy statements to three roles: Chief Executive Officer (CEO), Chief Financial Officer (CFO), and the single highest paid executive. The current requirement to disclose the CEO, CFO, and the next three highest-paid executives, while historically grounded in promoting transparency, no longer reflects the evolving needs of investors or the realities of modern corporate governance.

We argue that reducing the number of disclosed NEOs will reduce administrative burden, enhance internal management flexibility, and bring U.S. disclosure practices more in line with international norms—without materially reducing the quality or utility of information available to shareholders.

• Focus on the Most Accountable Roles – The CEO and CFO remain the two most publicly accountable officers in the organization. If an Executive Chair exists and holds strategic influence or oversight responsibility, their inclusion adds meaningful context. These roles are the primary architects of strategy and stewards of financial results.
• Aligns with Global Disclosure Norms – Many global jurisdictions—such as Canada, the UK, and parts of the EU—require executive pay disclosure only for the CEO and CFO or top three executives. U.S. companies are at a comparative disadvantage due to broader disclosure, which can create internal tensions and external misinterpretations.
• Reduces Reporting Burden and Legal Risk – Preparing disclosures for five NEOs requires extensive data collection, legal review, and narrative support. Reducing the number of required disclosures simplifies reporting, reduces risk of error, and frees up time and resources that could be focused on improving the clarity and utility of the remaining disclosures.
• Protects Strategic Talent and Succession Planning – Top-performing executives or potential successors often receive elevated pay as part of retention strategies or succession grooming. Publicly disclosing their compensation may create internal competition or expose strategy-sensitive roles to outside poaching, undermining long-term planning.
• Minimizes Distraction from the Core Pay Narrative – Current proxy disclosures often divert attention to peripheral roles, diluting the focus on overall pay-for-performance alignment. Concentrating on the most senior leadership roles allows investors to focus on governance at the highest level, where strategic decisions are made.

The time is right to recalibrate executive compensation disclosure. By limiting mandatory NEO reporting to the CEO, CFO, one additional executive (if applicable), companies can focus on transparency where it matters most while streamlining administration, protecting strategic talent, and aligning with global norms. This reform supports both investor interests and corporate flexibility.

Global Comparison Table