TheCorporateCounsel.net

During his testimony last week before the US House Appropriations Subcommittee regarding the SEC’s budget, Chairman Cox discussed how the SEC has made “great strides in increasing participation” by Staffers in the Commission’s telework program. He noted that “during the first half of this year, we increased our telework participation to more than 1,100 employees. This represents an increase of 532 over the level at the start of fiscal 2005.”

He also noted that “our evaluation to date of our Virtual Workforce pilot program within the Division of Corporation Finance, we are considering options for expanding the program to other divisions and offices within the agency.” This pilot program consists of Staffers who work from home 100% of the time; whereas the telework program consists of Staffers who work from home one or two days per week. Both efforts are part of an overall initiative within the federal government to encourage more teleworking (which saves $ on office space, etc.). I’m sure there are lots of ex-Staffers out there wishing they had never left…

Comments from Corp Fin’s Office of Global Security Risk

During his testimony, Chairman Cox noted that the Office of Global Security Risk issued comments to 137 companies over the past year. I believe these comments often come in this form:

“We note the several references to your operations in ___. Please identify for us the __countries in which you have operations. If any of these operations are in a country identified by the U.S. State Department as state sponsor of terrorism, or if you have other contacts with any such country, identify each such country for us. Advise us also whether your __subsidiary is in __, a country identified by the U.S. State Department as a state sponsor of terrorism.

If any of your operations or other contacts is with a country identified as a state sponsor of terrorism, please advise us of the materiality of those contacts to the Company, and give us your views as to whether those contacts constitute a material investment risk for your security holders.

If you have contacts with more than one such country, provide the requested information with respect to your contacts with the countries individually and in the aggregate. In preparing your response, please consider that evaluations of materiality should not be based solely on quantitative factors, but should include consideration of all factors, including the potential impact of corporate activities upon a company’s reputation and share value, that a reasonable investor would deem important in making an investment decision.”

On a related note, last Thursday, the SEC jointly released this special study with the Federal Reserve and Office of the Comptroller regarding sound practices to strengthen the resilience of the US financial system.

Grasso Pay Package ‘Shocked’ Board

Couldn’t resist this short article from Friday’s WSJ describing the NYSE Board’s “Holy Cow” moment: “A newly surfaced document calls into question whether the board of the New York Stock Exchange fully understood the scope of the pay package being offered to former Big Board boss Dick Grasso. That $188 million pay package is the subject of a lawsuit against Mr. Grasso by New York state’s attorney general, Eliot Spitzer, whose case argues that such compensation was inappropriate for the head of a what was then a nonprofit organization.

The NYSE’s board “did not receive detailed information from the compensation committee,” according to internal notes prepared by former New York Stock Exchange Compensation Committee Chairman H. Carl McCall and his assistant in 2003. Mr. McCall’s notes said he realized that the board was in the dark when he started chairing the NYSE’s compensation committee in June 2003. The NYSE is now part of publicly listed NYSE Group Inc.

The notes became public by court order Wednesday after they came up during Mr. Spitzer’s deposition of Linda Scott, Mr. McCall’s assistant. They indicate that many board members were “shocked” when Mr. McCall gave them a “heads up” on the size of Mr. Grasso’s pay package.”

da Vinci Code Judge Embeds Own Code in Ruling

Who says that lawyers don’t have a sense of humor? UK Judge Peter Smith, who decided the case brought against Dan Brown involving “The Da Vinci Code,” embedded a coded message in his ruling: smithcodeJaeiextostpsacgreamqwfkadpmqz. This coded message has now been cracked. Judge Smith’s clerk confirmed that the judge is a “humorous type of person.”