January 9, 2006

SEC Ready to Propose New Executive Compensation Disclosures

The SEC has set Tuesday, January 17th as the date on which the Commission will consider proposing new executive compensation and related-party transaction disclosures for proxy statements. The Commission also will consider whether to propose requiring that most of the disclosure in proxy and information statements be provided in plain English. Here is the SEC’s announcement.

As a result, we have pushed back the dates of our first two webcasts in the proxy disclosure webcast series so that they will include guidance based on the SEC’s upcoming proposing release. The dates of the webcasts are now:

– “Your Upcoming Proxy Disclosures: What You Need to Do Now!” (January 26th)
– “Meeting the SEC’s New Expectations: Real Life Examples (and Explanations)” (January 31st)
– “Related Party Transactions: What Disclosures You Need to Make Now!” (February 1st)

Come join SEC Staffer Paula Dubberly; Ron Mueller; Mark Borges; Alan Dye and more on these webcasts, which will be critical for the disclosures you prepare this proxy season! Try a no-risk trial or renew your membership to to catch these programs.

Extension of Grace Period

As I blogged last week, memberships to our publications expired on December 31st. In response to an email to non-renewers – indicating that the grace periods on our sites ended today – our HQ has been crushed by folks who waited until the last minute to renew.

As a result, we have extended the grace periods for a few days – so renew today in order to access Wednesday’s webcast on “Forecast for 2006 Proxy Season and Solicitation Strategies to Consider.”

Who’s Too Busy For The Annual Meeting?

Last week’s article in the NY Times about Sovereign Bancorp pushing back its annual meeting – because management and the board were “too busy” – further solidified its hold on the title of governance posterchild of the year.

The company said the meeting could be pushed back at least four months so management could ”focus its full attention” on a complex three-way deal in which it will sell a roughly 20% stake to Banco Santander Central Hispano of Spain and then use the proceeds to help buy Independence Community Bank. That deal is the subject of a heated battle, partly due to its own governance issues, as I have blogged about before on

Here is an excerpt from the NY Times article: ”There is no valid excuse for manipulating the timing of the annual meeting,” Franklin Mutual Advisers, Sovereign’s second-largest shareholder, said in a statement. ”What kind of rationale is it to say that the board is essentially ‘too busy’ to convene an annual meeting? And what ‘potential confusion’ can be so debilitating as to justify taking away shareholders’ right to vote?”

Even investors who say they support management said they disagreed with the company’s tactics. ”If they are confident in what they are doing and confident in their ability to sell the story, they should let the vote happen,” said David Watson, a vice president at Anchor Capital Advisors, a money management firm based in Boston. ”They are getting into games I don’t think they should be getting into.”

The postponement of an annual meeting is uncommon, corporate governance specialists say. When it does happen, it is typically because of an inability to produce timely financial statements or as a way of avoiding a nasty takeover fight. It is highly unusual for a board to justify a delay by saying it is too busy with an acquisition.

”Companies that postpone meetings are ones that fear the outcome,” said Gregory P. Taxin, chief executive of Glass, Lewis & Company, a proxy advisory firm. ”If we allowed political officials to do this, we would live in a banana republic with a bunch of dictators.”