March 30, 2004

SEC Looking at Enforcement Action

Today, the Wall Street Journal has an interesting cover story about how the SEC is considering enforcement action regarding the timing of option grants – whether grants are made just before market-moving information is released. This arguably also would have the effect of understating the level of executive compensation, since the market-moving information would quickly put the options “in-the-money.” The article doesn’t identify any companies nor indicate whether SEC action is imminent.

As the article points out, coincidences may arise because a board might grant options at the same meeting as approving the release of quarterly earnings. This obviously is a practice to avoid going forward.

As has been reported earlier in The Corporate Counsel (see the Jan/Feb ’04 and Sept/Oct ’03 issues), the SEC’s Enforcement Division has been requesting documents related to executive compensation arrangements from a number of companies over the past year – and this likely is just one of various possible enforcement theories they are considering to tackle perceived executive compensation abuses.

Last of the SEC Speaks Notes

From PLI’s “SEC Speaks,” notes from the enforcement panel and from the accounting workshop.

The Compensation Consultants Speak Out!

If you didn’t catch the NASPP’s webcast on March 18th, the transcript is now posted regarding “What The Top Compensation Consultants Are NOW Telling Compensation Committees.”

Reliving the webcast through the transcript bore out how useful the program was in this time of transitioning beyond what is legally required in the exec comp area.