|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
Perfomance-Pay Disclosure: Is the Honeymoon Over?, In the second year of the Compensation Disclosure & Analysis requirements for proxies, more companies are complying. But what will happen to those that don't?
David McCann
cfo.com. April 9, 2008
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EXCERPT: Will companies that play fast and loose with the Securities and Exchange Commission's rules for disclosing executive pay begin to feel the lash of the SEC this year? Indeed, there's evidence that some employers may be feeling the pressure already. Proxy season is here, and this year more companies are disclosing specific performance goals that determine their top executives' compensation. The disclosures are in line with Securities and Exchange Commission rules that took effect in late 2006. Sixty-eight percent of 75 large, publicly traded companies whose proxies were analyzed by Watson Wyatt made such disclosures. The human resources and compensation consulting firm looked at mostly Fortune 500 and some Fortune 1000 companies that made their 2008 filings by the first week of April. In a similar analysis done a year ago, Watson Wyatt found that 54 percent of large companies had disclosed the performance goals, leaving a sizable number that either ignored the new SEC regulations or walked through one of a couple loopholes. The increase in disclosure was more than Watson Wyatt had expected. In an online survey it conducted in January of this year, only 42 percent of companies said they had definite plans to adhere to the SEC's admonishments about revealing more compensation information, while 27 percent were unsure. In effect, it seems, those that were unsure ended up playing it safe—and disclosing the performance goals. Whether the SEC will get more aggressive about enforcing its new Compensation, Disclosure & Analysis rules is still unclear. The commission has acknowledged that it considered last year a learning-curve period. But it also said it expected companies to make the required disclosures starting this year. To show the corporate community it was serious, last October the SEC sent letters to 350 companies it deemed to have provided insufficient disclosure. That move seems to have spurred more companies to comply. "I think this is a victory for the SEC," said Ira Kay, global director of executive compensation for Watson Wyatt. The SEC did not return a call by press time. |
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