The proposed rules would implement a requirement mandated by the Dodd-Frank Act and provide greater transparency for shareholders.

The Securities and Exchange Commission yesterday voted to propose rules requiring companies to disclose the relationship between executive compensation and financial performance.

“These proposed rules would better inform shareholders and give them a new metric for assessing a company’s executive compensation relative to its financial performance,” said SEC chair Mary Jo White. “The proposal would require enhanced disclosure that can be compared across companies.”

Companie would have to disclose related information for the last five fiscal years, except for smaller reporting companies which would only be required to provide disclosure for the last three fiscal years. 

The proposed rules provide phase-in periods for these requirements.

The comment period for the proposed rules will be 60 days after publication in the Federal Register.