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Draw me a picture…

One part of the SEC’s proposal to improve disclosure on executive compensation involves getting rid of the 5-year performance graph that is currently required in all proxies. To be sure, that information is readily available online and besides, some companies tend to — how can we say this politely? — take creative licensing with their graphics.

Need evidence? Just look at this chart filed in Spectrum Brands (SPC) recent proxy. Now look at the same 5-year chart that just compares Spectrum (formerly known as Rayovac) to the S&P Small Cap index. Big difference. Of course, throwing the two Russell indices into the 5-year chart filed with the SEC only helps to muddy things up. Indeed, it’s not even clear why the two Russell indices are included since according to Yahoo Finance, Spectrum is part of these three other indices. As an additional experiment, I decided to try out the new Google Finance and also saw a chart that also looked dramatically different than the one pictured in the proxy.

Of course, the real question is how many Spectrum investors would really take these extra steps to check the companies graphic against other sources. My guess is very few. So while some folks are sad to see the five-year performance go, unless the SEC is going to hold companies accountable for a more accurate picture, it’s probably better that investors get their information elsewhere.

One final note: With comments on the SEC proposal due by April 10, I’ll be writing about this a bit more frequently over the next few weeks. While some comments have come in already, the juicy stuff is usually filed closer to the deadline. Here’s where you can submit your own comments on the proposed rules. And here’s where you can read what other people are saying.