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During last week’s House hearing on Fannie Mae, Rep. Baker introduced a chart detailing the compensation received by the top 20 executives and also noted that the company awarded nearly $250 million in bonuses – bonuses, not option windfalls! – over the past five years. According to a NY Times article from last Thursday, this “figure stunned even the company’s strongest supporters.”

In The Corporate Counsel, we have written about how boards might be surprised when they tally up what might be paid out under pay elements that are not well understood. Learn how to understand them at the October 20th compensation conference during the panel on “What is the Appropriate Amount of Compensation for CEOS,” which will address:

– What responsible ways (and yardsticks) can be used to structure each component of top executives’ compensation, including cash compensation, bonuses, stock compensation, retirement plans, severance and more
– What types and levels of compensation are now appropriate for CEO pay – and how to identify them
– What should be the role of surveys regarding CEO pay; including how to overcome the problems of defining peer groups
– How to critically evaluate survey data and avoid the pitfalls of benchmarking – red flags and nuggets
– How to implement internal pay equity methodology

Is Chairman Donaldson a Short-Timer?

On Friday, I was in NYC to speak at IRRC’s annual proxy conference and didn’t think much of it when I heard SEC Commissioner Goldschmid give a speech on the 1st year anniversary of the shareholder access proposal railing against the Commission for not having adopted anything yet – because I already knew Goldschmid’s views and the fact that this proposal was still being debated behind closed doors on the 6th floor of the Commission as SEC Chairman Donaldson remains the swing vote.

So, I was a little surprised to read the Saturday NY Times that quoted Donaldson as stating that he was undecided if he would stay on if President Bush is re-elected – and there certainly were signs in the article that he might not stay for too long as Donaldson said that “he never sought the position” and “looked forward to other projects.” Perhaps Commissioner Goldschmid was pleading for action now as the future of this proposal could get quite murky once the November election passes.

Delay of Options Expensing?

In the same NY Times article, SEC Chair Donaldson also stated that he was considering a delay in the FASB’s option expensing proposal – even before he received a request to delay expensing from 51 US Senators last week (this request came in the form of 4 separate letters). The FASB meets this Wednesday to discuss the proposal’s status.

In July, the US House of Representatives voted overwhelmingly to stop the implementation of option expensing by passing a bill requiring instead that only a small portion of stock options – those given to a company’s top five executives – be expensed. This House-backed bill has been blocked in the Senate by Banking Committee Chair Richard Shelby – supporters are hoping to bypass his opposition by attaching the legislation as an amendment to a budget bill this week, but most action on the budget probably won’t happen until after the November elections.

Importance of Maintaining a Company-Wide Document Retention Policy

For the those of you involved with document retention, you should read this interview with Alan Yudkowsky and Peter Jazayeri on Frank Quattrone, Arthur Andersen, and the Importance of Maintaining a Company-Wide Document Retention Policy.