US: SEC to Propose Overhaul of Rules On Executive Pay

[Judi Lynn]

US: SEC to Propose Overhaul of Rules On Executive Pay
Changes Would Increase Transparency in Reporting Perks, Retirement Benefits

by Kara Scannell, Washington Post
January 10th, 2006

The Securities and Exchange Commission, responding to rising criticism of soaring -- and partially hidden -- executive pay, is poised to propose the most sweeping overhaul of pay disclosure rules in 14 years, seeking to push companies to divulge much more about their top executives' perquisites, retirement benefits and total compensation.

The proposed changes, according to SEC officials, would for the first time require corporate proxy statements to provide a column with a total annual compensation figure for each of a company's five highest-paid executives and be far more specific about the value of their various benefits. Total compensation is an elusive number under the current system, and one for which investor advocates have long sought greater disclosure.

In addition, the SEC would force companies to take the monetary value of the stock-option grants given to top executives and place those figures side-by-side with salary and bonus information. Under a new accounting rule, companies must start expensing the value of their stock options.
{Christopher Cox}

These and other proposed changes will be presented at a public SEC meeting on Jan. 17, where commissioners will question staff members and vote whether to proceed with the plan. If approved, the proposed overhaul will be subject to a period of public comment, followed by a final SEC vote.
(snip/...)

http://www.corpwatch.org/article.php?id=13071

[blm]

1. Now that they've spent the last decade cramming their pockets, they can't

handle the bad image they have - so, somehow they will push through some PR firm created MASK to prove they're not self-aggrandizing money worshippers.

[melm00se]

2. maybe an accountant can answer this

while this is a good thing, I am wondering if the options are expensed now and are never exercised (due to stock price stagnation or drop), what is the process, on the books, for bringing those options back in?

(i have been curious about that since companies have started to expense options under GAAP and there seems to be a smart bunch of folks here)

[msgadget]

3. Damn, that looks good and I'd be happy

if the SEC hadn't given a certain politically connected private citizen a pass on insider trading back in the day. I have doubts about them not having a 'leaning'. Our country is currently being ruled by industry and I'd feel more optimistic about this effort if it occurred under another administration.

All that cynicism aside, it's a good thing that it's even being considered because it affects all of us when companies govern by share price so their upper echelon can prosper.

[blm]

4. That's why I have the feeling this is going to end up as a cosmetic before

an election at a time when the GOP economic policies have all favored the wealthiest while the working class has to work harder for less money and benefits.