August 15, 2005

SEC Chair Cox Speaks on Executive Compensation Practices

Below is an excerpt from this transcript of an interview held last Wednesday with new SEC Chair Chris Cox on the PBS’ “Nightly Business Reports”:

DHUE: Runaway executive pay has long been criticized. Is that something that the agency is going to take out?

COX: Executive compensation is much in the news and there have been some very notorious cases of apparent excess. It should be, of course, in the main up to shareholders to discipline that kind of activity, but in order for shareholders to do that, they`ve got to have good information. I think you can look in the near future to the SEC for some improved rules on disclosure to make sure that, for example, shareholders can have one number, that the different kinds of executive compensation add up to a number that`s comparable executive to executive and company to company and at the same time that this information is provided in a timely way before rather than after the fact.

DHUE: Shareholder activists have also tried to rein in executive pay through the proxy process. Do shareholders need greater access to the proxy so they can be the watchdog on corporate management?

COX: Of course investors and particular equity owners own the company and it`s very much in shareholder interests to discipline executive compensation and make sure it`s in line with the market, making sure they`re getting full value and also to make sure that everything else about the company is running well and with a view to doing well and good at the same time. Shareholders, I think, will find it increasingly easy going forward to look after their interests because technology is making it possible for information to move so much more quickly. We can have better analysis, more cheaply in the hands of investors more quickly than ever before. And the SEC is going to look at every possible way of making sure that our disclosure requirements are up to date and providing investors what they truly need.

Looks like Chairman Cox might be in favor of tally sheet use! We continue to post new sample tally sheets in the “Tallying Up Total Compensation” Practice Area of In addition, our “2nd Annual Executive Compensation Conference” includes a session entitled “How to Devise the Appropriate Tally Sheets” featuring Mike Kesner, who is head of Deloitte’s Exec Comp Practice and Pearl Meyer, who is the Chair of the firm that bears her name.

M&A Accounting Issues

On, the last leg of the popular M&A Boot Camp is available – Howard Dicker of Weil Gotshal does a great job parsing through accounting issues, both basic and those that relate to M&A.

It’s not too late to catch the entire 5-part series of the “M&A Boot Camp,” as all five are now up and available! If you are not a member, try a no-risk trial and take advantage of our half-price “Rest of 2005” rate – believe it or not, a license for a single user is only $100 and there are similar reduced rates for offices with more than one user! Among the many other resources, you can catch the upcoming webcast on September 21st – “Winning Strategies in Auctions” – featuring David Katz of Wachtell Lipton and Eileen Nugent of Skadden Arps.

Bueller? Anyone?

As a fan of the movie “Ferris Bueller’s Day Off” – I grew up in Chicago and attended Lane Tech HS before moving to Bethesda in 10th grade – I was taken aback to see a column blurb entitled “Bueller? Anyone?” in Friday’s WSJ (scroll down halfway through the column). Kudos to the WSJ for a light moment!

The article describes how a roll call of director nominees at a recent annual shareholders’ meeting semi-paralleled the movie’s sarcastic take on high school roll calls. I always thought I was cool because I answered “Yo” in response to the teacher’s call of my name – did I mention I never went on dates? That was a classic scene from the movie – here is a web site that provides a script, etc. from the movie…