November 24, 2003

SEC Staff as Referee for

At the ASCS Issues Update conference last Thursday, Corp Fin Director Alan Beller talked about the need for the SEC staff to act as referee for the “opt-in” shareholder proposals that companies are receiving now (“opt-in” proposals are those that act as a trigger under the SEC’s proposed shareholder access framework – i.e. submitted by a 1% shareholder and asking shareholders whether they want a shareholder nominee to be added to the ballot the following year).

Alan was uncertain when the staff would provide written guidance in this area (my guess is it will come through no-action letter responses) and pointed out that the staff could act as referee at 3 different points in time: when a company receives a proposal, when the company delivers proxy materials, and when shareholders vote. It did not appear that Alan was too concerned about the ABA’s assertion that the SEC doesn’t have the authority to retroactively apply triggering events that occur before a proposal is finalized.

By the way, Alan did confirm that the newly adopted disclosure rules on nominating committees/shareholder communications would indeed apply to 9/30 companies – in fact, the adopting release just came out and states that the rule is effective January 1, 2004, and that the disclosures will apply to proxy or information statements that are first sent or given to security holders on – or after – January 1, 2004. The disclosures will apply to 10-Qs and 10-Ks for the first reporting period ending after January 1, 2004.

Senate Bill Seeks to Expense Options Only for Top 5 Officers

On November 19, a bipartisan group of senators – Senators Mike Enzi (R-Wyo.), Harry Reid (D-Nev.), John Ensign (R-Nev.), Barbara Boxer (D-Calif.) and George Allen (R-Va.) – introduced a bill that would require that a company expense the options of only the CEO and the next four most highly compensated executive officers. The stated purpose of the bill was to be a compromise aimed at convincing the FASB to back down from making companies expense all options.

Wanna See Something Cool?

If so, you gotta check out these photographs of the universe taken by the Hubble telescope.