On CompensationStandards.com, we have posted a table of contents for the SEC’s 370-page proposing release – complete with page numbers. This TOC can be inserted to replace pages 5-7 of the release – and it is posted in the new “The SEC’s Proposals” portal, where we continue to post analysis and commentary on the SEC’s proposal. Thanks to Eliot Robinson of Powell Goldstein for this useful contribution!
More Companies to Follow Intel’s Majority Vote Lead?
In this recent article, ISS notes that more companies are thinking of adopting pure majority vote standards like Intel did a week ago. For example, the article says Temple-Inland has agreed to adopt such a standard in the face of a shareholder proposal. Note that Temple-Inland doesn’t mention this as a development on their website, so I can’t confirm that it’s true.
Results from Board Leadership Survey
Here are the results from our recent survey on board leadership. These results are repeated below:
1. Does your company have a non-executive chairman of the board?
- Yes – 36%
- No – 64%
2. If the answer to #1 is “Yes,” the non-executive chairman is selected by:
- CEO – 0%
- Majority of independent directors on the board – 20%
- Majority of all members of the board – 67%
- Nominating or governance committee – 13%
3. If the answer to #1 is “Yes,” is the non-executive chairman position rotated among independent directors?
- Yes – 0%
- No – 100%
4. Does your company have a lead director on the board (not including a non-executive chair)?
- Yes – 41%
- No – 59%
5. If the answer to #4 is “Yes,” the lead director is selected by:
- CEO – 0%
- Majority of independent directors on the board – 44%
- Majority of all members of the board – 31%
- Nominating or governance committee – 25%
6. If the answer to #4 is “Yes,” is the lead director position rotated among independent directors?
Late Friday, the SEC posted this 370-page proposing release regarding executive compensation and related-party transaction disclosures. Reads like a novel; here are some page numbers for a handful of the many key sections of the release:
- description of new “Compensation Discussion & Analysis” section (pgs. 16-19)
- discussion of possible double-counting of comp (p. 24)
- introduction of revised “Summary Compensation Table” (p. 25-26)
- discussion of “Total Compensation” column (p. 27)
- discussion of Plan-Based Awards tables and use of 123R valuations (p. 30-38)
- discussion of proposed Perks requirements (p. 43)
- interpretive guidance regarding what a perquisite is (p. 46-48)
This is just the tip of the iceberg for a 370-page release; learn more about “what you need to do now” from our two imminent webcasts noted below.
What You Need to Do Now!
As many of us are in the process of drafting proxy disclosures for this proxy season, the following two CompensationStandards.com webcasts are very timely:
- David Lynn, Chief Counsel, SEC’s Division of Corporation Finance
- Alan Dye, Partner, Hogan & Hartson and Editor of Section16.net
- Amy Goodman, Partner, Gibson, Dunn & Crutcher
- Beth Young, Senior Research Analyst, The Corporate Library
To catch these webcasts, try a no-risk trial (or renew your membership) to CompensationStandards.com.
Perk Disclosures Could Come Back to Haunt Your CEO
As this article from Saturday’s WSJ illustrates, greater perk disclosure elicited by the SEC’s guidance will facilitate the ability of activists to use it in a campaign against management. The WSJ reports that Carl Icahn plans to pressure Time Warner’s management “in the coming weeks by spotlighting what he says are egregious expenses and perks.”
Yesterday’s NY Times ran this excellent interview with Nell Minow on executive pay, which is a nice companion piece for the podcast I did with Nell last week. And for a laugh, check out the article – “Brother, Can You Spare a Perk?” – in the February 6th issue of Forbes (can’t find a link for this one).
Disney CEO Succession Planning Under Attack
Remember the closely-followed CEO succession tale at Disney last year, when recently departed CEO Michael Eisner’s candidate won the job. Now, the New York Post reports that Disney’s lead director buried a negative evaluation of Robert Iger, Disney’s new CEO. Disney has denied the allegation. Here is an excerpt from Friday’s New York Post article:
“Disney Chairman George Mitchell quashed a negative evaluation of Bob Iger by the media giant’s executive search firm Heidrick & Struggles last year and never brought the report to the full board, sources familiar with the matter told The Post.
The banished report – which few members of Disney’s board even knew existed – raises new questions about the legitimacy of Disney’s search for Michael Eisner’s replacement.
Sources said Mitchell felt the report, brought to him by Heidrick & Struggles’ Senior Chairman Gerard Roche, was too negative on Iger, who was the preferred candidate of both Mitchell and Eisner to take Disney’s reins.”
I’m sure we will be hearing more about this – but it’s a good time to get a refresher on CEO succession planning from our “CEO Succession” Practice Area, including this interview with Mark Van Clieaf on Bona Fide CEO Succession & Selection Processes. By the way, you can register for a free confidential strategic duty audit on Mark’s new site for directors.
Last week, the SEC approved a NYSE rule change to change the procedures that delinquent filing companies must follow. Under revised Section 802.01E, the NYSE has:
- adopted separate criteria for monitoring the continued listing status of those companies that have a position in the market (relating to both the nature of their business and their large publicly-held market capitalization) such that delisting from the NYSE would be significantly contrary to the national interest and investor interests (notwithstanding a delay in an annual report filing that extends beyond one year); and
- shortened the initial monitoring period for companies that miss their filing due date from 9 months to 6 months
- lengthened from 3 months to 6 months the additional period that the NYSE may grant companies prior to the commencement of suspension and delisting procedures
Phyllis Plitch notes in her article that Fannie Mae stands to benefit the most under this controversial rule change. We will be posting more information about these new procedures in our “Delisting” Practice Area.
FASB to Clear Up Another Option Expensing Issue
From Mike Melbinger’s Compensation Blog: “While we wait for the SEC’s executive compensation proposals, the FASB continues to issue helpful interpretations – “FASB Staff Pronouncements” or “FSPs” – on some of the more frightening issues that have arisen under FAS 123R.
Last week, it issued a proposed FSP addressing the problem of options that may be settled in cash under certain circumstances (usually only upon certain types of changes in control). The proposed FSP seems to require that options or similar instrument be classified as liabilities, rather than compensation, if “the entity can be required under any circumstances to settle the option or similar instrument by transferring cash or other assets.” (Paragraph 32). For liability awards, compensation expense must be recognized in the same manner as for stock-settled awards, but the fair value is remeasured each quarter, based upon any change in the market value of the stock covered by the award.
Provisions that allow options to be settled for cash upon certain changes in control are important for a variety of reasons and included in most well drafted option plans or award agreements (as discussed in my April 29, 2005 Blog). Thus, simply eliminating this feature from plans and award agreements is not a satisfactory alternative.
Rather than require that options be classified as liabilities if they could be settled for cash under any circumstances, the FSP would allow the company to apply a “probability” standard that assesses the probability that that the change in control circumstance would occur. Since the “change in control” circumstances under which most plans permit options to be settled for cash are relatively rare, this could be a good result for companies.”
Governance Reform Report Card
Yesterday, I was chuckling about the Washington Post’s article about how governance reform has fared, particularly the “report card” from four experts. On how executive pay is working, Harvey Pitt gave a grade of “D” and Nell Minow gave it an “F” – on the other hand, the Business Roundtable Governance Task Force Chair gave a grade of “B” and a Professor gave a grade of “B+.” The academic gave exec pay practices higher marks than a member of management!
I have been battling a few academics on the pay issue for the past several weeks, such as a rebuttal to two Wharton professors yesterday who wrote that pay might not be excessive because its high levels could be a result of supply/demand and the complexities of the global market. Those two labels are just too easy to apply without some explanation; I feel they fail to take into account the “real world” causes that we have extensively written about in The Corporate Counsel.
Or consider this excerpt from a recent WSJ article: “The average CEO’s salary in the U.S. is 40 times greater than the average worker’s salary. In Japan, it is 11 times greater; in France, 15 times; in Canada, 20; in South Africa, 21, and in Britain, 22.”
This morning, I posted the following comment to a blog regarding the Washington Post article from Professor Ribstein:
1. Executive compensation reform doesn’t have to come from the regulators; in fact, it shouldn’t. Rather, it should come from those primarily responsible – boards and their advisors.
2. Compensation reform can help to stop corporate fraud because the incentives to commit fraud could be minimized. Why do you think numbers were smoothed so much over the past decade? Likely because option grants became a routine annual event (when they originally were never intended to be so).
Executive compensation is well-known to be at the heart of corporate governance – yet, Sarbanes-Oxley and all the other recent governance reforms didn’t touch executive compensation. That time has come.
Bill McDonough may not know how to properly pay executives – but many that practice in the field do. For example, here are four simple tools we recommend to ensure that pay is appropriate:
Yesterday’s WSJ ran this article about how Congress is seeking to effectively cap payouts under SERPs for executives at troubled companies. According to the article, the limitation is tucked into a pension bill that is expected to be passed into law this spring. Remember my repeated warnings about Congress using executive pay as a political football if boards don’t take matters into their own hands!
Here is an excerpt from the article:
“Congress still hasn’t worked out the final restrictions on executive retirement plans, but they may kick in when a company’s defined-benefit pension plan is funded at 60% or less of its projected liabilities.
Traditional, or defined-benefit, pension plans, in which benefits are based on an employee’s pay and years of service, are considered underfunded if their assets fall short of the sum they expect to pay out in the future. Such plans have been on the decline in recent years as companies have sought to shift more of the burden of retirement savings to their employees, but they are still common in highly unionized industries.
The House plans to press for language in the measure that would block payment of new benefits to every manager covered by a troubled company’s executive retirement plan. The Senate and the Bush administration, according to House and Senate staff members, believe the new rule should apply only to the company’s highest-ranking executives. If a troubled company were to go ahead and fund its executive plans anyway, it would face stiff tax penalties.
The pension-overhaul bill that contains the measure is expected to be sent to President Bush before mid-April. when many companies are required to make contributions to their defined-benefit plans.”
Delaware Supreme Court Considers Disney Appeal
Yesterday, the Delaware Supreme Court heard oral arguments in the appeal of last year’s Disney case. Professor Gordon Smith has all the appellate briefs posted on the Conglomerate Blog – and a number of professors weighed in yesterday with their analysis of the hearing as they watched it via webcast. Here is a Reuter’s article summarizing the hearing. The Supreme Court has 90 days to decide, although a decision is expected sooner.
PCAOB Standing Advisory Group to Consider Auditor Liability Caps
Yesterday, the PCAOB announced that its February 9th standing advisory group meeting will include “possible effects of the inclusion of litigation-related clauses in audit engagement letters” on its agenda. That should be interesting!
The bottom line is that we have squeezed our three webcasts down into two (and made them both longer) – because we know many of you need practical implementation guidance as soon as possible. To catch these webcasts, try a no-risk trial (or renew your membership) to CompensationStandards.com.
- What is RetailRoadshow.com?
- What is its level of traffic so far?
- What do you think issuers and underwriters will be doing with their roadshows going forward? Creating two distinct versions? Keeping them offline entirely?
- What are your production practice tips for those thinking of doing an online roadshow?
Forecast for 2006 Proxy Season and Solicitation Strategies to Consider
We have posted the transcript from the popular webcast: “Forecast for 2006 Proxy Season and Solicitation Strategies to Consider.”
From Lyle Robert’s “The 10b-5 Daily” Blog: The National Law Journal has an article on the widening exposure of law firms in securities class actions. Although the Supreme Court’s prohibition on aiding and abetting liability in private securities fraud actions has generally shielded law firms, in some cases courts have found that the law firms acted as primary violators. Plaintiffs have added fuel to that fire by arguing that even if a law firm did not make (or substantially participate in) a misrepresentation to the market, it can be held liable as a primary participant in a fraudulent scheme. (For more on scheme liability, see this post.)
The PCAOB has posted the last of its inspection reports to be issued on each of the six largest auditing firms, which cover inspections conducted during 2004 for selected 2003 audits performed by these firms. The latest inspection report is for Grant Thorton.
The report notes numerous auditing deficiencies, as have the five earlier reports. A number of the deficiencies relate to auditing of financial instruments, such as derivatives. In fact, there recently have been over 40 restatements related to errors in accounting for derivatives and hedges.
For NASPP members, there is a webcast program tomorrow – “Drafting the New Option Expensing Disclosures” – during which SEC Corp Fin Chief Accountant Carol Stacey, Ron Mueller and Keith Higgins will discuss the 10-Q and 10-K (as well as earnings release) disclosures that are now required due to mandatory option expensing. If you are not a NASPP member yet, take advantage of a no-risk trial.
Who is that Masked SEC Staffer?
From Jim McRitchie’s CorpGov.net: “Who says all government employees knock off early because they don’t have entrepreneurial incentives? Shareholder activist John Chevedden writes: Perhaps this is like an urban legend – On the Monday Holiday at 5:00 p.m. I picked up a telephone message from the SEC in Washington, DC and figured there was no reason to call back due to the 3-hour time difference. Then about 10:00 p.m. I decided I would just leave an answering machine message. And the person answered the telephone at 1:00 a.m. in DC!”
In this podcast, Nell Minow, Editor of The Corporate Library, provides her reactions to the executive compensation disclosure proposals from last week’s open Commission meeting and the ongoing majority vote movement, including:
- What do you think of the SEC’s new executive compensation proposal?
- How do you think the new related-party transaction disclosures will impact investor attitudes?
- What importance do you place on the majority vote movement?
- Do you think hedge fund or other short-term activists might abuse a majority vote standard?
- Might other more traditional activists now use their “no” votes differently under that standard?
Is ISS Conflicted?
Today’s Washington Post includes this lengthy article about ISS and its potential conflicts.
Should We Merge or IPO?
For those participating in tomorrow’s DealLawyers.com webcast – “Should We Merge or IPO?” – please print off these course materials from Dave Segre of Wilson Sonsini. In addition to Dave (who did Google’s IPO), join Jim Fulton of Cooley Godward, Scott Stanton of Morrison & Foerster and banker Ralph Della Ratta of Western Reserve Partners.
On the heels of recommendations from the ABA Director Voting Task Force’s preliminary report, which I blogged about yesterday, comes an announcement from Intel that it has amended its bylaws to adopt a majority vote standard, which includes a director resignation provision to address hold-overs. This excerpt from Intel’s related press release – and Form 8-K – explains how the holdover provision works:
“Under the laws of Delaware, where Intel is incorporated, if an incumbent director is not elected, that director continues to serve as a “holdover director” until the director’s successor is duly elected and qualified. To address this potential outcome, the board has also adopted a director resignation policy in the company’s bylaws. If an incumbent director is not elected by a majority of the votes cast, the director shall offer his or her resignation to the board. The Corporate Governance and Nominating Committee would then make a recommendation to the board on whether to accept or reject the resignation, or whether other action should be taken. The board will publicly disclose its decision and the rationale behind it within 90 days of the certification of the election results.”
This is quite a development that bears watching, particularly since investors are said to be quite unhappy with the ABA’s preliminary report recommendations. If you haven’t been watching the developments in this area so far, it bears pointing out that Intel’s approach differs significantly from the so-called “plurality plus” approach of Pfizer and a few dozen other companies that have adopted director resignation provisions in their corporate goverance guidelines – because those guidelines operate under a plurality voting standard. We have added Intel to our “Chart: Companies w/ Majority Vote Governance Guidelines.”
Change in the NASD’s WKSI Exemption Policy
In various forums, the NASD Staff previously confirmed that the NASD would not require the filing of a registration statement on behalf of a WKSI, unless the offering was subject to the NASD’s conflict-of-interest rule (Rule 2720). Now, the NASD appears to have changed that policy exemption.
For more information on this change, set forth below is an explanation from an e-mail sent yesterday by the ABA’s NASD Corporate Financing Rules Subcommittee. The email reflects a conversation that two members of the Subcommittee had recently with the Staff of the NASD Corporate Financing Department and General Counsel’s Office:
“The NASD’s new position is that if a registered offering by a WKSI cannot rely on an exemption from NASD filing currently in NASD Rule 2710(b)(7), the offering must be filed with the NASD for review. The most relevant exemptions are for: (1) offerings of any security by an issuer with an outstanding issue of investment grade rated unsecured non-convertible debt/preferred securities with an original term of at least four years (except if an IPO); (2) shelf offerings on Forms S-3 or F-3 (under standards before October 21, 1992); (3) shelf offerings by Canadian issuers on Form F-10 (as of June 21, 1991); and (4) offerings of investment grade debt.”
New French Whistleblower Process and Related EU-SOX Compliance
Thanks to Mark Schreiber of Edwards Angell Palmer & Dodge and Raphael Dana of Soulier for these documents that you need for complying with French whistleblowing laws that are translated into English: CNIL Single Authorization and Decision; CNIL Introduction to Single Authorization; and CNIL Forms for Single Authorization. These are posted in our “Whistleblowers” Practice Area.
In this podcast, Mark and Raphael discuss the latest developments with the French CNIL’s just published online single authorization program. This is where the real work for US companies complying with SOX in EU now starts. The new CNIL single authorization process is the first of the simplified compliance processes in Europe – and the European Commission Article 29 Working Group has begun to endorse this model on a pan-European basis, meaning other EU countries will likely follow suit. The podcast discussion includes:
- How can companies now comply with the new single authorization and final CNIL guidelines on whistleblower schemes in France?
- What exactly is the new CNIL online compliance process, what are the underlying company requirements, how long does it take, and what strategic choices do US and other companies need to make to qualify?
- How is this new process consistent with SOX and does the SEC agree?
- What does the new CNIL authorization process mean for complying with whistleblower laws in other European countries?
During a panel yesterday at Northwestern’s 33rd Annual Securities Regulation Institute in San Diego, according to some emails I received from attendees, SEC Corp Fin Associate Director Paula Dubberly spoke briefly about the upcoming proposing release on the executive compensation disclosure rules, including:
- there will be interpretive guidance that would apply to 2006 proxy statements
- the SEC likely will encourage early adoption of some of the narrative disclosure
- the proposing release isn’t likely to be available until next week at the earliest
Preliminary Report from the ABA’s Director Voting Task Force
The American Bar Association’s Director Voting Task Force released its preliminary report on majority voting earlier this week. The report recommends that the plurality default standard be maintained in the Model Business Corporation Act; but that companies could choose to adopt bylaw provisions that would require directors – who received more “withheld” votes than “for” votes – to remain in office for no more than 90 days. The board may, but is not obligated to, appoint “any qualified individual” (including the director who received more votes against him/her than for him/her) to fill this vacancy. In addition, the report contemplates revisions to the MBCA that would facilitate and enforce resignations tendered by directors. The Task Force is soliciting comments on its proposals (by February 20th). We have posted a copy of the preliminary report in our “Majority Vote Movement” Practice Area.
EC Issues Cross-Border Directive
Here are selected excerpts from an article in the latest ISS Friday Report:
The European Commission has unveiled its latest draft of a directive to remove barriers to shareholder voting. The proposal, almost three years in the making, seeks to ensure that investors in European Union companies will have timely access to complete information and can easily exercise their voting rights across national borders.
In large markets such as the United Kingdom, Spain, Italy, France or Germany, more than 30 percent of the share capital of listed companies typically is held by non-resident shareholders. In other countries such as Luxembourg, Latvia, Hungary, Belgium, or the Netherlands, this proportion may reach 50 percent, and in some cases as much as 70 to 80 percent.
Earlier EU reports noted that many national laws governing shareholder meetings and voting have not been updated to reflect the modernization and computerization of share holdings and are ill-suited to modern investing and cross-border investment. Key obstacles faced by non-resident shareholders include share blocking, insufficient or late access to information, and overly burdensome requirements on distance voting.
The proposed directive, which would eliminate the main obstacles to cross-border voting and enhance other shareholder rights, calls for the following minimum standards:
- General meetings should be convened with at least 30 days notice. All relevant information should be available on that date at the latest and posted on the corporate issuer’s website. The meeting notice should contain all necessary information. An earlier version of the directive proposed a 21-day standard.
- Share blocking should be abolished and replaced by a record date, which should be set no earlier than 30 days before the meeting. Record dates are now used in the U.S. and the U.K.
- All shareholders, including non-residents, should have the right to ask questions, either in person or by mail.
- Shareholders with at least 5 percent of a company’s outstanding shares (or a stake worth at least 10 million euros ($12 million)) should have the right to present a resolution for a vote.
- Proxy voting should not be subject to excessive administrative requirements, nor should it be unduly restricted. Shareholders should have a choice of methods for distance voting.
- Voting results should be available to all shareholders and posted on the issuer’s website.
To take effect, the new directive must be ratified by both the European Parliament and the European Council under the process of codetermination. If both bodies approve it, then the EU member states will be required to incorporate the rules into their own company laws in order to be compliant. This process may take anywhere from eight months to two years, depending upon how many changes the Parliament or Council make.
Apologies for not blogging “live” from the meeting like footnoted.org – but as you can see from Michelle’s entries yesterday, there typically is not much action at open Commission meetings (she was soliciting $1 donations to pay for her train down to the meeting; my guess is she won’t travel again for such limited content – plus the meetings are webcast and thus few attend physically from outside the building).
In my book, the highlight of the open meeting was when Chairman Cox jokingly suggested that a bunch of schoolteachers be hired to do plain English reviews of company filings. Guess that might have spooked some Corp Fin lawyers as to whether they have any real job security!
As fleshed out in the SEC’s press release, the proposals would refine existing tabular disclosure and combine it with improved narrative disclosure (and cover the CEO, CFO and the three other highest paid executive officers and the directors), including these noteworthy developments:
1. A new “Compensation Discussion and Analysis” section would replace the Compensation Committee Report – focusing on the most important factors underlying each company’s compensation policies and decisions. Not sure yet if comp committee members names would still be listed underneath (not likely since the new section would be considered “filed” rather than “furnished”).
2. Executive compensation disclosure would be organized into three categories: (1) compensation over the last three years; (2) holdings of outstanding equity-related interests received as compensation that are the source of future gains; and (3) retirement plans and other post-employment payments and benefits.
3. The Summary Compensation Table would be reorganized – and include a new column for total compensation and a dollar value for all stock-based awards, measured at grant date fair value (computed pursuant to FAS 123R).
4. The perk threshold would be reduced to $10,000 – and more importantly, the proposing release will include interpretive guidance is provided for determining what is a perquisite (meaning that compliance is likely to be mandatory for this proxy season).
5. Two supplemental tables would report Grants of Performance-Based Awards and Grants of All Other Equity Awards.
And much more, such as tables for outstanding equity interests, retirement plan, post-employment, etc. There even would be a Director Compensation Table similar to the Summary Compensation Table. And there are proposed changes to the 8-K disclosure requirements, including consolidation of all Form 8-K disclosure regarding employment arrangements under a single item.
The SEC’s Related Party Transactions and Director Independence Proposals
As expected, the SEC’s proposals also would update related party disclosure requirements. Principal changes would include required disclosure regarding policies and procedures for approving related party transactions, a slight expansion of the categories of related persons and a change in the threshold for disclosure from $60,000 to $120,000.
The requirement to disclose these transactions would also be made more principles-based. They also would require disclosure if the company is a participant in a transaction in which a related person has a direct or indirect material interest.
A proposed new item (Item 407 of Regulations S-K and S-B) would require:
- disclosure of whether each director and director nominee is independent;
- a description of any relationships not otherwise disclosed that were considered when determining whether each director and director nominee is independent; and
- disclosure of any audit, nominating and compensation committee members who are not independent.
Perhaps the SEC has been sitting on the NYSE’s proposal – that touches upon director independence issues – to ensure that its own proposal doesn’t pose a conflict. So maybe we shall see the NYSE release put out for comment by the SEC sooner rather than later.
Over the past week, I’ve had fun spending time educating reporters about how the SEC’s disclosure framework works – and how executive compensation practices figure into all of this. Hey Mom, I was quoted in the Palm Beach Post and the Middle East North Africa Financial Network (which picked up a story from the Chicago Tribune)! All good stuff.
Then yesterday, I started getting a little crazy tooling around the Web and rebutting some bizarre postings from academics who have criticized Chairman Cox and claim that enhanced executive compensation disclosures will cost too much. I’ve heard a few arguments against enhanced disclosure, but none until now based on the projected cost of the disclosure. For the life of me, I don’t see how you can equate the SEC’s new proposal to the very costly internal control regulations (404 is much more than mere disclosure).
The only costs involved in the new proposal is the steep learning curve for those of us that draft disclosures, as most of the data that will underlie the new disclosures is readily available. All companies already collect compensation data for financial and tax reporting purposes – and many companies started collecting the data in a format similar to what the SEC now seeks as part of implementing tally sheets. In fact, I would argue that – down the line – the new tables will be easier to put together than the disclosure that is required under the existing disclosure framework.
Grace Periods Are Over
As I blogged last week, memberships to our publications expired on December 31st. Our extra extension period is now over – and non-renewers aren’t able to access content from our sites. Renew today in order to access any of our upcoming webcasts. Please don’t contact me as I don’t handle renewals – instead, renew online or contact our HQ in California at 925.685.5111 or email@example.com.