SEC Staff Observations On Executive Compensation Disclosure

On October 9, 2007, the SEC Staff released its long-awaited report presenting its observations from the Staff's ongoing review of disclosures under the SEC's enhanced executive compensation rules.¹ On the same day the report was issued, John W. White, director of the Division of Corporation Finance, spoke at the 2nd Annual Proxy Disclosure Conference in San Francisco, providing further observations.² This Commentary analyzes the impact of the report and highlights important issues for consideration during the upcoming 2008 proxy season.

Background

In 2007, the Staff undertook a review of the executive compensation disclosure of 350 public companies to evaluate compliance with the new executive compensation disclosure rules and to provide guidance on how these companies should improve disclosure in future filings. The Staff has indicated that its reviews are ongoing and that additional comment letters can be expected later this year.