TheCorporateCounsel.net

April 26, 2007

The Fortune 50: Compensation Disclosure Trends

Much thanks to Marc Trevino and Joseph Hearn of Sullivan & Cromwell for this interesting survey of compensation disclosure trends by the Fortune 50 (it’s really a survey of 30 companies from the Fortune 50; those are the companies that had filed as of the survey date). We have posted this survey on CompensationStandards.com under our “The SEC’s New Rules” Practice Area. I plan to blog about various statistics from this survey in the near future.

Results of Quick Survey: CD&As

Well over 400 of you responded to our recent survey on the CD&As drafting process. Below is a summary of the results:

1. At my company, the first draft of the CD&A was drafted by:

– In-house lawyer – 37.9%
– In-house corporate secretary – 7.4%
– Human resources staffer – 28.2%
– Outside compensation consultant – 8.1%
– Lawyer in outside law firm – 12.7%
– Other – 5.8%

2. At my company, the following people spent the indicated number of hours drafting and/or reviewing the CD&A (note – this survey is just the CD&A, not the remainder of the compensation disclosures and tables; if more than one person in a category spent time on the CD&A, combine their time):

a. In-house lawyers and corporate secretary staff

– 0-5 hours – 8.9%
– 5-10 hours – 8.7%
– 10-20 hours – 13.2%
– 20-30 hours – 14.8%
– 30- 40 hours – 9.2%
– 40-80 hours – 17.1%
– More than 80 hours – 28.2%

b. Senior management (ie. CEO and/or COO)

– 0-5 hours – 50.5%
– 5-10 hours – 26.9%
– 10-20 hours – 13.4%
– 20-30 hours – 4.9%
– 30- 40 hours – 1.7%
– 40-80 hours – 1.2%
– More than 80 hours – 1.4%

c. Human resources staffers

– 0-5 hours – 26.3%
– 5-10 hours – 12.0%
– 10-20 hours – 10.8%
– 20-30 hours – 7.3%
– 30- 40 hours – 10.8%
– 40-80 hours – 10.1%
– More than 80 hours – 22.7%

d. Accounting staff, including CFO and controller

– 0-5 hours – 31.3%
– 5-10 hours – 23.1%
– 10-20 hours – 15.5%
– 20-30 hours – 10.8%
– 30- 40 hours – 7.1%
– 40-80 hours – 6.8%
– More than 80 hours – 5.4%

e. Compensation committee and other directors

– 0-5 hours – 38.0%
– 5-10 hours – 34.7%
– 10-20 hours – 18.5%
– 20-30 hours – 5.4%
– 30- 40 hours – 1.4%
– 40-80 hours – 1.2%
– More than 80 hours – 0.7%

f. Outside compensation consultants

– 0-5 hours – 50.2%
– 5-10 hours – 17.5%
– 10-20 hours – 16.0%
– 20-30 hours – 6.8%
– 30- 40 hours – 4.4%
– 40-80 hours – 3.6%
– More than 80 hours – 1.5%

g. Outside lawyers

– 0-5 hours – 27.8%
– 5-10 hours – 24.0%
– 10-20 hours – 18.3%
– 20-30 hours – 9.3%
– 30- 40 hours – 7.8%
– 40-80 hours – 4.3%
– More than 80 hours – 8.6%

Quick Survey: Board Evaluations

Please take a moment to participate in this Quick Survey on Board Evaluations.