Former Leicester City boss has been nominated alongside Jurgen Klopp and Ole Gunnar Solskjaer.
Pearson has enjoyed a strong start to life as Watford head coach after being appointed last month, winning two of his four matches in charge.
Recall that the Hornets beat Manchester United and Aston Villa at Vicarage Road and earned an impressive point at Sheffield United as they closed the gap to 17th place to just two points.
Meanwhile, Jurgen Klopp has guided Liverpool to five wins from their five matches in December.
They extended their lead at the top of the table to 13 points with a game in hand, recording wins over the likes of Everton and Leicester and conceding just two goals.
Also, Solskjaer has managed Manchester United from ninth to fifth during December.
The Red Devils have closed the gap between fourth place from eight points to five.
They won four of their seven matches, including wins over Tottenham and Manchester City.
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