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Client Alert

SEC Issues Observations on Executive Compensation Disclosures

November 13, 2007

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The Securities and Exchange Commission recently released a report summarizing its principal comments to the 350 public companies involved in the SEC’s initial review of disclosures made under the new executive and director compensation disclosure rules. According to the SEC, two principal themes emerged from the reviews and comments to the companies' reports. First, the SEC stressed the importance of the manner of presentation – in particular, using plain English and organizing tabular and graphical information in a way that helps the reader understand a company's disclosure. Second, the Compensation Discussion and Analysis should be more focused on how and why a company arrives at specific executive compensation decisions and policies. As a result of the SEC's comments, reviewed companies may be required to amend proxy materials or, more likely, revise disclosures in future filings, and all public companies -- even if not reviewed -- should follow the SEC's guidance from the report.

Click here to read a copy of our client alert regarding the SEC's report.

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