The Financial Accounting Standards Board has moved forward with a significant change that will require public companies to disclose more granular details about their employee compensation packages, including incentive compensation, in financial reports.

The new accounting standard will fundamentally change how businesses track and report compensation, especially in areas like bonuses, commissions, and other variable pay structures. While this change aims to bring more transparency, it highlights a glaring issue: many companies don’t fully understand the true cost or return on investment of incentive compensation, and have no way to properly measure or report on their programs’ business impact. READ MORE