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SEC Proposed Rules on Executive Compensation Shed Wage Clarity, Not Wage Controls, Says CCH
CCH Provides Detailed Analysis of Compensation and Disclosure Reform
(RIVERWOODS, ILL., February 23, 2006) – The Securities and Exchange Commission (SEC) has proposed the most sweeping reforms in well over a decade to executive compensation and related party disclosure. The broad purpose of the new proposed regime is to improve disclosure by including all elements of executive and director compensation.
In a 36-page analysis, The SEC’s Proposed Executive Compensation and Related-Party Disclosure Reforms, CCH’s Lead Securities Analyst James Hamilton, JD, LLM looks at each of the core provisions of the proposed rules, including the new Compensation Discussion and Analysis, and accompanying tables, the new retirement disclosure and reporting thresholds for executive perks. CCH is a leading provider of securities law information and software and part of Wolters Kluwer Law & Business (www.cch.com).
“It’s up to a company’s board of directors, not the SEC, to determine the appropriate level of executive pay,” said Hamilton. “But what the Commission can do is establish rules that seek to ensure investors have available all of the compensation information they need, presented clearly, in an organized fashion and in plain language. This will provide for a better understanding of how corporate resources are being used in this area.”
In his analysis, Hamilton notes that one example of how shareholders could effectively use this information relates to proxy statements for the annual meeting at which directors are elected.
“Improved disclosure would provide better information to shareholders for purposes of evaluating the actions of the board of directors in fulfilling its responsibilities to the company and its shareholders,” said Hamilton.
The new rules were proposed January 17, 2006. The deadline for submitting comments to the SEC is April 10, 2006.
About the Author
James Hamilton has written extensively on the federal securities laws and has been cited as an authority by federal courts and treatise writers. His analysis of the Sarbanes-Oxley Act, the Sarbanes-Oxley Manual: A Handbook for the Act and SEC Rules, is considered a definitive explanation and is often used in professional conferences and seminars. He also has authored the popular guidebook Guide to Section 16: Insider Reporting and Short-Swing Trading Liability, co-authors the annual guide Responsibilities of Corporate Officers and Directors under Federal Securities Law and serves as leading contributor to the industry-standard publication, CCH Federal Securities Law Reports.
For a free copy of The SEC’s Proposed Executive Compensation and Related-Party Disclosure Reforms , contact Sally Lim at email@example.com.
About Wolters Kluwer Law & Business
Wolters Kluwer Law & Business is a leading provider of research products and software solutions in key specialty areas for legal and business professionals, as well as casebooks and study aids for law students. Its major product lines include CCH, Aspen Publishers, Kluwer Law International and Loislaw. Wolters Kluwer Law & Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods, Ill.
Wolters Kluwer is a leading multinational publisher and information services company. Wolters Kluwer has annual revenues (2004) of €3.3 billion, employs approximately 18,400 people worldwide and maintains operations across Europe, North America and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands (www.wolterskluwer.com). Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.
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EDITOR’S NOTE: If you would like to arrange an interview with James Hamilton or would like a complimentary copy of The SEC’s Proposed Executive Compensation and Related-Party Disclosure Reforms, please contact Leslie Bonacum (847-267-7153 / firstname.lastname@example.org) or Neil Allen (847-267-2179 / email@example.com). CCH also offers ongoing analysis of securities law at: http://business.cch.com/securitiesLaw/news/default.asp.