This SEC Order, In the Matter of The Dow Chemical Company,
is a great refresher—at Dow's expense, unfortunately for
Dow—on the analysis required to determine whether or not
certain expenses and benefits are perquisites or personal benefits
that must be disclosed in the Summary Comp Table in the proxy
statement. As you probably know, the analysis for determining
whether an item is a disclosable "perk" can be very
tricky to apply, especially when it involves the use of corporate
jets by executives and their friends and families. The SEC
claims that Dow applied the wrong standard altogether in its
analysis, failing to disclose over a five-year period $3M in CEO
perks and understating the CEO's disclosed perks by an average
of 59%. Dow settled the charges for a fine of $1.75M and also
undertook to engage an independent consultant that would perform a
review of Dow's policies, procedures and controls and conduct
training related to the determination of perks.
