SEC Proposes To Revise Executive Compensation Disclosure: Sweeping Reform Or "Groundhog Day"?

In a much anticipated action, the SEC have voted to propose new executive compensation disclosure rules. The SEC also proposed changes to disclosure about related party transactions and compensation committees in annual disclosure documents and disclosure of new and amended executive compensation arrangements in current reports on Form 8-K. These reforms will not be in place for the 2006 proxy season and remain subject to comment. However, U.S. public companies should consider these proposals as they evaluate their disclosure and compensation practices this year. The SEC's press release is available on its website at http://sec.gov/news/press/2006-10.htm.

The changes highlighted by the SEC staff yesterday are an expansion and further development of the SEC’s significant 1992 reform efforts in this area, rather than a complete overhaul of existing rules. At the open meeting, Commissioner Atkins said that he was reminded of Bill Murray’s character in the movie "Groundhog Day." As the