SEC Guidance Affects Form 8-K Disclosure of Executive and Director Compensation

Originally published February 14, 2005

New Form 8-K rules issued by the Securities and Exchange Commission (the SEC) became effective on August 23, 2004. The new rules greatly expanded the disclosure requirements under the Securities Exchange Act of 1934 and shortened the filing deadline for most 8-K items to four business days after the occurrence of any reportable event. These rules represent a shift toward more "real time" disclosure, as contemplated by Section 409 of the Sarbanes-Oxley Act of 2002.

On November 23, 2004, the staff of the SEC's Division of Corporate Finance (the Staff) issued 30 frequently answered questions (FAQs) regarding the new rules. Nearly half the FAQs relate to issues concerning compensation paid by reporting companies to directors and executive officers pursuant to "material definitive agreements." Since the release of the FAQs, the Staff has given informal indications at conferences and in conversations with lawyers in our firm that they are reading the