Just when you thought you were finally getting a handle on the executive compensation disclosures, the SEC is considering changing them. According to an alert by McGuireWoods, the SEC staff has reviewed the disclosure requirements of Reg S-K (all of them, not just the disclosures relating to executive compensation) and issued a report that includes recommendations for further review. The JOBS Act of 2012 (not to be confused with the Jobs Creation Act of 2004) required the study with respect to disclosures by emerging growth companies, but the SEC expanded it to cover all companies.
The staff's recommendations with respect to the executive compensation disclosures are fairly vague; they point out that these disclosures can be quite lengthy and technical and further review might be warranted on this basis, as well as to confirm that the information disclosed is useful to investors. The staff also suggests that the disclosures be reviewed to determine if they need to be made simpler for smaller companies.
So maybe the disclosures will change and maybe they won't. According to the report, there weren't any comments submitted to the SEC's JOBS Act website on the executive compensation disclosures. Interestingly, there were two comments suggesting that the table disclosing the number of shares outstanding and available for grant under stock plans approved by shareholders and not approved by shareholders could be eliminated (and one comment that this table shouldn't be eliminated, proving once again that you can't please all the people, all the time).
According to McGuireWoods, at this time, the SEC is still formulating an action plan with respect to the study; a time frame hasn't been specified for completing any further reviews called for under the study, much less promulgating and transitioning to any new rules.
Did You Know?
I did learn a couple of interesting tidbits when reading the section of the SEC's report that covered the executive compensation disclosures. I thought you might be interested to know that:
SEC Updates Item 405 Disclosure and Due Diligence Requirements
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