We’re not the only one asking the questions anymore…
The Wall Street Journal is reporting that nearly 300 U.S. companies received a faxed letter from the SEC today asking them to better explain the pay packages of top executives. The letters are in response to the SEC’s review of many companies’ first stab at the new executive compensation disclosure rules that went into effect back in December.
Companies had already been cautioned in this speech by SEC Director John White to ensure they provided compensation disclosure AND analysis, not just disclosure. Judging by the number of letters sent out, many companies did not heed this warning.
Interestingly, the letters were addressed to company CEOs, not CFOs, the latter being the SEC’s normal practice. As a result, the Journal noted that many CEOs had mixed reactions, ranging from annoyance to anxiety. Too bad, execs. Even if you refuse to answer to shareholders, you still face the scrutiny of the SEC. Get ready to advise or revise.