New SEC Executive Compensation Regulations Go Into Effect, Improving Corporate Transparency

Share Article

New rules went into effect Friday, December 15, 2006 requiring public companies to provide more detailed information about executive pay packages and perks to investors in their filings with the SEC. These changes are aimed at increasing corporate transparency and come amidst widespread option backdating probes and the well-publicized, widening wage gap between executives and employees.

New rules went into effect last Friday requiring public companies to provide more detailed information about executive pay packages and perks to investors in their filings with the SEC. These changes are aimed at increasing corporate transparency and come amidst widespread option backdating probes and the well-publicized, widening wage gap between executives and employees.

The SEC's new filing requirements will add to existing disclosure tables found in SEC filings and require companies to adopt a "principles based" approach to compensation disclosure - essentially requiring them to disclose and explain all material executive compensation in plain English. These changes will affect all SEC filings that require compensation disclosures, beginning this week.

The centerpiece of the SEC's new regulation is the "Compensation Discussion and Analysis" (CD&A) section. This was created to provide detailed information regarding executive compensation packages, why decisions were made, by whom, and the links between the different elements of compensation as it relates to company and individual results.

"CD&A is what gives meaning to the numbers found in the required tables," said Justin Kuepper, Senior Editor and SEC filings specialist at Accelerize New Media. "While some executives are highly paid and earn every penny, there are many executives that receive excessive compensation while investors lose millions. The new regulations will help curb these practices by forcing companies to discuss, in detail, how they come up with compensation amounts."

Other significant changes include new director disclosure requirements, increased compensation committee exposure, more specific "related person" transaction reports, along with a host of other changes aimed at increasing corporate transparency.

"While recent regulations have helped increase corporate transparency, many investors still don't know where to find the information," said CEO Brian Ross. "Our goal with ExecutiveDisclosure.com is to take the data found in these SEC filings and deliver them to the public in a way that is both comprehensive and easy to understand."

ExecutiveDisclosure.com provides full coverage of this and other SEC regulations along with in-depth compensation research tools. The free web service allows users to track compensation amounts with E-mail alerts and RSS feeds, compare compensation with performance, view industry compensation data, rate and review executives, and view specific Company and Executive SEC filings. Advanced tools individually track various forms of compensation, including: long-term incentive plans (LTIPs), security underlying options (SARs), restricted stock, and board position changes. Users interested in insider trading can be alerted via E-mail when insiders buy or sell stock, or receive or exercise options via SEC Filing Forms 3, 4, and 5.

Accelerize New Media Inc.'s network of Financial Information Portals allows professionals and investors to research and track corporate intelligence, executive compensation data and real-time SEC Filings (via SECFilings.com). The company offers turnkey Investor Relations Websites to public companies (via ShareHolderTools.com) to ensure timely disclosure of financial information to shareholders. Online marketing services include lead generation and customer acquisition solutions for clients to reach and stay in contact with target audiences.

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Brian Ross
Visit website