SEC Commissioner Emphasizes The Need For Robust Proxy Disclosure

Paul S. Lawler is a Associate in our Tampa office

On February 20, 2013, SEC Commissioner Luis A. Aguilar delivered a speech regarding the need for more robust disclosure in proxy statements and highlighted areas in which disclosure can be substantially improved.

Mr. Aguilar acknowledged that many public companies have made a good effort to enhance the quality of their proxy statements in recent years, but he encouraged companies to view proxy and other disclosure requirements as an opportunity to engage and inform their shareholders, rather than merely a box to be checked.

Compensation Risks

Although, by its terms, Item 402(s) of Regulation S-K under the Securities Act requires a narrative discussion of a company's compensation policies and practices relating to risk management only "to the extent" that risks arising from the issuer's compensation policies and practices are "reasonably likely to have a material adverse effect," Mr. Aguilar advised that it