SEC Issues Staff Observations in the Review of Executive Compensation Disclosure
The SEC issued its "Staff Observations in the Review of Executive Compensation Disclosure" today. This guidance grows out of the SEC's review of the executive compensation disclosures of 350 public companies, and gives a summary of the types of comments the SEC gave on various companies' compensation disclosures, and why it gave those comments. John W. White, the Director of the SEC's Division of Corporation Finance, also gave a speech today in which he discussed CD&A disclosures. You can view a text of the speech here.
Highlights of the staff observations on CD&A include, among other things:
- Focus on the how and why of decisions that were made;
- Emphasize material items, and de-emphasize immaterial items;
- Spend less time explaining mechanical procedures and lengthy statements on philosophy and more on how key decisions were made; flip the order--explain how the analysis resulted in the decisions made;
- Presentation matters--consider the order in which items are presented and how they are presented; and
- Consider adding tables that aren't required if they elucidate material issues.
The SEC guidance is helpful and worth reading.
