April 4, 2006

Corp Fin Director John White: “The Need to Know”

Wasting scant time in making his first speech as the new Director of Corp Fin, John White delivered an impressive speech yesterday on what companies should consider this year in anticipation of the SEC adopting its executive compensation proposals. Emphasizing that he was speaking from the perspective of a private practitioner – in which he served just two weeks ago – John addressed both substance and process.

Among other substantive issues, John noted:

1. Total Compensation – time for all companies to use tally sheets

2. Processes for Setting Compensation – think about the story you’d like to tell, and reshape your processes now.

3. The Role of Executive Officers – reshape role of any executive for whom you would not want sunlight on their involvement

4. The Role and Identity of Compensation Consultants – Know the answers to these two queries:

– What are the nature and scope of their assignments? What instructions have they received?

-If the compensation committee engaged a consultant, did that same consultant do any work for the company or for any executives?

On the process front, John talked about the possible need to retool the disclosure controls and procedures to ensure that the appropriate data is captured to comply with the coming final rules. He noted that the disclosure committee might need to be tweaked to handle the different type of disclosures that could be elicted.

John’s speech was before an intimate audience for Stanford’s new corporate governance center’s inaugural program, which essentially was a roundtable on executive compensation disclosure. Set in a building besides the SEC’s headquarters, most of the SEC’s Commissioners attended as each panel offered a variety of views on the SEC’s compensation proposal (and I laughed, I cried, etc.).

SEC’s Cox Rules Out 404 Exemption for Small Companies

Apparently after Chairman Cox kicked off the Stanford program with a speech on executive compensation – according to a Bloomberg article – he told reporters on the way out that “small companies won’t get an exemption from Sarbanes-Oxley rules requiring independent auditors to certify they’re complying with securities laws.” I didn’t hear the Chairman say this nor can I find any other article on it. [In a speech, Commissioner Campos recently implied he also would not support an exemption.]

If true, this is an interesting development given that Rep. Oxley and Baker themselves have written a letter to the SEC stating that they believe that the SEC does have exemptive power here – which was followed by a letter from 20 professors that expressed the view that the SEC didn’t have the authority to provide such an exemption.

Downloading Our Webcasts

Some time ago, I blogged about software to help those members that wish to download our webcasts to listen to them in the car, etc. One member recently shared information about three new software programs that facilitate saving the audio streams by converting them to MP3 files, which can then be burnt to CDs:

URL Helper – to analyze the HTTP calls and help extract the exact URL necessary to directly download the stream (this information is often masked from the end-user, making this application quite handy)

HiDownload – ties right into URL Helper and allows direct downloads of the stream in the native format

Smart Audio Converter – converts from/to all major audio formats out there (wma, mp3, ogg, etc.)