August

SEC (US Securities and Exchange Commission) (dark gray) Image

US SEC expands disclosures about executive compensation

01 Aug 2006

The US Securities and Exchange Commission has adopted changes to the rules requiring disclosure of executive and director compensation, related person transactions, director independence and other corporate governance matters, and security ownership of officers and directors.

The changes would affect disclosure in proxy statements, annual reports, and registration statements, as well as the current reporting of compensation arrangements. The rules would require that most of this disclosure be provided in plain English. Click for (PDF 69k). In announcing the new disclosure requirements, SEC Chairman Christopher Cox said:

With more than 20,000 comments, and counting, it is now official that no issue in the 72 years of the Commission's history has generated such interest. The better information that both shareholders and boards of directors will get as a result of these new rules will help them make better decisions about the appropriate amount to pay the men and women entrusted with running their companies. Shareholders need intelligible disclosure that can be understood by a lay reader without benefit of specialized expertise or the need for an advanced degree. It's our job to see that they get it.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.