As we approach the third anniversary of the date when incentive compensation “received” is subject to clawback, we have taken a closer look at the disclosures companies have made since implementation.

This Thoughtful Pay Alert summarizes our findings from reviewing publicly available disclosures of “recovery analyses” conducted between January 1, 2024 and June 30, 2026.

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Three years after our first survey documented the reemergence of contingent value rights (“CVRs”) in public life sciences M&A, 2025 marked their biggest year yet. A record 28 of 59 announced public life sciences transactions (approximately 47%) included a CVR, the highest ever annual count and share. The concentration was even greater in biopharma, where over half of announced public biopharma transactions included a CVR. CVRs also moved upmarket and carried more of the potential deal value. More than a third (approximately 37%) of the $1 billion-plus life sciences CVR deals in our full dataset (going back to 2008) were announced in 2025 and the first half of 2026. Moreover, nearly half of all life sciences CVR deals above $3 billion were announced in 2025 and the first half of 2026, with two additional CVR deals over $3 billion announced since June 30, 2026. In addition, 2025 produced more CVRs with maximum potential payouts exceeding 100% of the upfront consideration than any other year surveyed.

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Last year, we identified ten trends that we expected to shape shareholder activism in 2026. Those trends included: increasing M&A-focused activism, emboldened occasional activists, less visibility into shareholder views, the normalization of serving as a dissident nominee, and more “withhold” campaigns.

The 2026 proxy season has largely borne out our expectations. Activism continued at elevated levels globally in the first half of 2026. Approximately 40% of campaigns involved an M&A-related thesis, fueled by a constructive regulatory and financial environment. However, the high volume of activism has not translated into a corresponding increase in proxy fights going to a vote. Settlements remain the principal mechanism for resolution, with a significant number of settlements being announced prior to any public agitation by the activist. The proxy voting system is also becoming more fragmented, and therefore less predictable, as the “Big Three” institutional investors split their voting teams, pass-through voting becomes more prevalent, and large investors increasingly incorporate AI into their voting models.

Against this backdrop, we expect the following ten trends for the year ahead.

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KEY TAKEAWAYS

• Personal security benefits are becoming more common. Among S&P 500 companies, prevalence of CEO personal security increased from 35% to 54% year over year, while approximately 47% of companies now provide personal security to at least one additional named executive officer (NEOs).
• Growth is most pronounced below the CEO level. Median personal security values for other NEOs rose from approximately $10K to $32K, while the 75th percentile increased from approximately $32K to $143K.
• Security programs are becoming more multidimensional. Based on most recent 2026 proxy disclosures, there are increased references to digital protection, cybersecurity monitoring, online privacy services, personal data removal, home network monitoring, and independent risk assessments.
• Personal Aircraft usage values increased. CEO aircraft usage values increased 17% at the median and 37% at the 75th percentile, with meaningful increases also reported for other NEOs.
• Disclosure quality is improving. Disclosures increasingly address digital security, independent risk assessments, and governance oversight.

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The emergence of digital asset treasury companies (“DATs”) and crypto-pivot companies – public companies that have repositioned all or a substantial portion of their corporate strategy around the acquisition, accumulation, and management of digital assets – has introduced a new and rapidly evolving sector of public companies to the market. Since the beginning of 2025, a growing number of public companies have adopted some version of the playbook: reposition legacy businesses around digital asset treasury strategies; accumulate digital assets on the balance sheet; and, in some cases, deploy digital assets to generate returns through staking,[1]  lending, protocol participation, and related activities. Early DATs and crypto-pivot companies attracted substantial institutional and retail capital because their stocks traded at a significant premium to the market values of their accumulated digital assets (i.e., their net asset value or “NAV”).

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SEC Proposes Semiannual Reporting, Broad Regulatory Relief for Compliance and Registered Offerings

Sweeping proposals from the US Securities and Exchange Commission would revamp public company reporting and streamline access to public capital markets. The proposals could become effective as early as 2027 or, more likely, 2028.

Companies would be free to choose each year to use one of several methods of reporting their interim financial results. They could switch to semiannual reporting on a newly created Form 10‑S, or they could maintain a quarterly reporting cadence either by filing traditional Form 10‑Q reports or by combining quarterly earnings releases with a semiannual Form 10‑S filing. The SEC’s proposal introduces flexibility and promotes private ordering, although companies will need to weigh the benefits of that flexibility against the implications of departing from established quarterly reporting conventions.

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Good morning, ladies and gentlemen. I regret that contemporaneous business out of town keeps me from joining you in person today, but I would be remiss not to briefly address this group—albeit pre-recorded—and to thank you for your spirited service on behalf of American investors. I am grateful, as ever, for the thoughtfulness with which you consider the key opportunities and challenges facing them today.

Before I continue, I must note the customary disclaimer that the views I express here today are my own as Chairman and do not necessarily reflect those of the SEC as an institution or of my fellow Commissioners.

To begin, your first panel will focus on a technological frontier that holds great promise, but can also provoke real questions and concerns. To that end, the perspectives of this Committee and today’s panel participants on the burgeoning influence of Artificial Intelligence—and its possible role in corporate disclosures—are important to the Commission.

Now, while AI may help alleviate certain analytical burdens in distilling information in SEC filings, some may infer from this that the Commission has latitude to depart from its longstanding principle of materiality when prescribing disclosure requirements. I, for one, do not share that view.

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There has been considerable attention to the shareholder resolution process in the last months. Institutional investors, religious investors, pension funds, have all been speaking out about protecting the right of shareholders to engage companies by filing resolutions. Yet the role and the impact of the small individual investor has been underplayed. In fact, two individual investors have had a significant impact on the policies and practices of governance in corporate America. They are John Chevedden and James McRitchie. They have filed thousands of resolutions with companies engaging them to improve their governance practices. And many institutional investors vote for these reforms, whether they are sponsored by an individual shareholder or by a widely known institutional investor. Some proposed governance reforms have become established practices embraced by many businesses, while others are still controversial items open for debate. We do not argue that every proposed reform presented to a company is necessary and wise governance for that company. But they do deserve thoughtful scrutiny and consideration.

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Executive Summary

• What’s new: The SEC announced a proposal to rescind Rule 206(4)-5 under the Investment Advisers Act in its entirety, including its prohibition on certain political contributions and its restrictions on the use of certain placement agents to solicit state and local government investors.
• Why it matters: The proposal is likely to be of particular interest to investment advisers, who have been subject to the rule’s “de facto” strict-liability standard, including an automatic two-year compensation ban even for small-dollar contributions that are often inadvertent foot-faults.
• What to do next: Public comments may be submitted now and will be due 60 days after the proposal is published in the Federal Register.

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On September 2, 2026, the U.S. Securities and Exchange Commission (the “SEC”) issued new Corporation Finance Interpretations (“CFIs”) in Q&A format regarding how Schedule 13G filers can engage with other investors and issuers without jeopardizing their Schedule 13G eligibility. These CFIs address beneficial owners of more than five percent of an issuer’s equity securities that are required to file on Schedule 13D or 13G and who, among other things, do not hold the securities with the purpose or effect of changing or influencing the control of the issuer. The new guidance supplements earlier CFIs from February 2025 that broadly chilled engagement of both dissident investors and issuers with significant passive shareholders, thereby decreasing investor and issuer visibility into their views.

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In a significant decision for public companies facing activism, the Delaware Court of Chancery last week held that a board may not reject a director nomination notice based on disclosure requirements that are not explicitly spelled out in the corporation’s advance notice bylaws. In ATG Capital Opportunities Fund LP v. Lane et al., Vice Chancellor Lori Will found that Empery Digital, Inc. had improperly rejected the nomination notice of an activist investor, ATG Capital Opportunities Fund LP, notwithstanding the Empery board’s well-founded concerns that ATG Capital did not disclose it was acting in concert with another investor and had taken a large short position in Bitcoin ETFs to hedge its position in Empery. The Court concluded that the rejection was not based upon the plain language of Empery’s advance notice bylaws and therefore represented inappropriate interference with the stockholder franchise.

This litigation came after ATG Capital took a significant stake in Empery and nominated a slate of nine director candidates to the board. The Empery board considered the notice and determined that it was deficient both because ATG Capital did not disclose (i) that another investor was acting as a “participant” in ATG Capital’s solicitation and (ii) its short position in Bitcoin ETFs, and because the nominee questionnaires contained certain omissions and inaccuracies. Following receipt of a rejection notice, ATG Capital sued Empery to compel the company to allow the dissident nominees to stand for election.

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Over the past decade, the public company CFO remit has rapidly evolved beyond the traditional financial scope to include operational and strategic responsibilities. To stay abreast and develop your finance talent as the role continues to evolve, understanding tomorrow’s CFO is paramount.

To better understand the current state of the role and hiring implications, Russell Reynolds Associates recently analyzed the backgrounds, career paths, and tenures of S&P 500 CFOs (N = 500). [1] Based on our findings, we identify three important trends in how CFO appointments have evolved over the years, as the war for talent continues.

1. High turnover leads to an extremely active market
2. Recent strides have been made in promoting women CFOs
3. The S&P 500 landscape is shifting towards strategically-oriented CFOs

Finally, we also review key considerations for CEOs, Boards, and CFOs as they continue to hire and develop their finance talent.

1. An active CFO market has companies forgoing traditional requirements

Over half of S&P 500 CFOs were hired into their role within the past three years. This high churn rate is the result of many factors, including a frothy IPO market in 2021 that significantly increased the number of public company CFO opportunities, as well as overall strong equity performance that allowed some to retire earlier. [2] While recent market slowdowns have slightly cooled the war for talent, increasing retirement rates and the ongoing search for talent from historically unrepresented minority groups, point to a CFO market that is far from stagnant [3] (To read more about CFO turnover in 2022, see our latest research.)

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Although efforts to improve diversity, inclusion, and equity (DE&I) of employees and leaders in organizations continue, the number of organizations tangibly tracking accountability for the outcome of those efforts is still relatively low.

Russell Reynolds Associates’ 2022 Global Leadership Monitor research identified that just 17% of global leaders we surveyed said executives at their organizations are compensated on DE&I outcomes. Even against a benchmark that low, there is no single industry or region leading the way on DE&I accountability. The Technology industry lags notably behind.

Without accountability metrics, it’s virtually impossible for organizations to measure their leaderships’ performance against DE&I objectives and to compensate them accordingly, as they would with other measures of business performance. As many research studies show the link between DE&I and organizational performance, DE&I metrics should be included more widely as a component of compensation-based accountability models.

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CEO succession planning works best when it’s a continuous process that constantly replenishes your pipeline of future leaders. And that means you need to start it early. In fact, the board should start planning for the next CEO from the first day a new one steps into the job.

From day one, you need to define what you want in your next CEO, find who in your organization has the potential to get there, and outline how you’ll develop those skills in the coming years. And, when it comes time to choose a successor, you’ll need to accurately assess your candidates to choose the right leader.

The question is, how do you start so early?

How do you define the skills your CEO will need years in advance? How do you find high-potential candidates? And how do you nurture them to ensure they’re ready to step up when the time comes?

Define what you need in a CEO

Great CEO succession starts with a success profile—a documented view of what your organization needs in its next CEO. While it’s difficult to predict the critical requirements for your next CEO five or six years in advance, a success profile will help you think about future needs systematically and align the board early in the process.

The board is solely responsible for appointing the CEO, so members need to discuss the success profile in detail. Unless the board defines and aligns to a robust success profile, you’ll be flying blind as you develop and choose your next CEO.

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One of a board’s most important responsibilities is selecting the CEO. Most boards have annual succession planning discussions and robust procedures to prepare for a transition. But, recognizing both the shrinking of leaders’ tenures and the shifting skill sets needed for future success, many boards are now making succession planning a continual process. Centered on an ongoing conversation with the CEO, the process might start with one or two candidates and then expand, internally or externally, as needed. Even under ideal conditions, however, succession is a sensitive process.

One way that boards can smooth the process is to prepare for a variety of compensation decisions. Compensation sends important signals, both intended and unintended. Choices about pay should support the motivation and retention of leading candidates as well as individuals in key supporting roles.

For example, the pay of internal candidates will likely need to change as their roles and mandates expand and as the board evaluates their capabilities. With the actual transition, the board may need to adjust compensation for the new CEO, the former CEO, and other executives remaining with the organization, along with any new senior leaders. One-time actions may be required to maintain stability throughout the leadership change.

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The board plays a critical role in bringing an organization’s strategic vision to life. As stewards, they help guide the organization through challenging times and are responsible for providing sound oversight that can help to sustain future success.

Ideally, the people sitting around the table in a corporate boardroom will each provide different sets of skills, areas of knowledge, and varied work and life experiences that collectively make the board stronger. But when too many sitting directors have similar backgrounds, diversity of perspective can suffer.

Increasing board diversity is by no means a new discussion. There are a number of benefits to board diversity, and directors have shared how valuable it is. According to PwC’s Annual Corporate Directors Survey, directors agree that increasing board diversity brings unique perspectives to the boardroom (93%) and improves relationships with shareholders (90%). More than four out of five say that it enhances board performance (85%), and about three-quarters agree that it improves strategy/risk oversight (76%) and company performance more broadly (75%).

With developments like the new Nasdaq listing requirement, we are already seeing some positive changes. In addition, large institutional investors and other stakeholders are also demanding more diverse boardrooms, but the fact remains—only 30% of director seats at S&P 500 companies are filled by women.

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The Delaware Chancery Court recently preliminarily enjoined a stockholders meeting in Bray v. Katz, No. 2022-0489-LWW (Del. Ch. June 24, 2022) (transcript). The case concerns a board of directors’ decision in advance of the upcoming annual meeting to lower the quorum requirement for stockholders meetings; it did so in order to preempt certain stockholders from blocking the election of the company’s slate of director nominees. The Court concluded that the board of directors acted with the primary purpose of impeding the exercise of stockholder voting power. Accordingly, the Court determined that the board’s actions implicated the heightened Blasius standard of review, which requires defendants to demonstrate a “compelling justification” for frustrating the stockholder franchise. In an exacting bench opinion, the Court found that defendants failed to demonstrate any such justification. Vice Chancellor Will’s ruling demonstrates the close scrutiny Delaware courts give to corporate acts that entrench the board and disenfranchise stockholders.

Background

UpHealth Inc. (the “Company”) had a nine-person classified board (the “Board”) with two co-chairs. Defendant Avi Katz (“Katz”), founder of the Company’s SPAC sponsor, GigCapital, served as one co-chair; the other co-chair was legacy UpHealth founder and plaintiff Chirinjeev Kathuria (“Kathuria”). The Company’s Class I directors, each serving three-year terms, were up for election at the 2022 annual meeting, originally scheduled for June 28, 2022.

After the Nomination Window Closes, A Majority of the Board Changes the Slate

The Company’s advance notice deadline passed on April 25, 2022, without any stockholder proposing any nominees for election.

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