New rules…

July 27, 2006

We interrupt our regular troll through the filings to talk about the new rules issued by the SEC yesterday. Though the actual rules aren’t out quite yet and the SEC still plans to tweak the so-called Katie Couric rule, the SEC’s press release does a good job at the highlights, which include a much more detailed summary compensation table, that (fingers crossed) hopefully won’t lead to an endless stream of footnotes as we saw at Warnaco earlier this year. But that’s probably wishful thinking!

Among the more interesting pieces are the added disclosure on pensions and deferred compensation as well as greater details on stock options, which, given the current scandal on options timing, are definitely needed. The new rules will also (fingers crossed again) lead to the end of those dreadful pension charts that currently take up space in proxies, but which are virtually impossible to make sense of. Also destined for the junk heap are those useless compensation committee reports which manage to say nothing in way too many words. We’re also happy to see the SEC retain the five-year performance chart, which footnoted.org regulars know is often a quick and dirty way to tell whether companies are manipulating things that are much more difficult to spot quickly.

So far, a few law firms have weighed in on the changes. Broc Romanek’s excellent site has posted several of those memos and I expect associates are busy pounding more out as we speak.

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