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I know I am biased, but I can honestly say that anyone I have spoken to – or emailed with – raved about our just-concluded Conference: “Implementing the SEC’s New Executive Compensation Disclosures: What You Need to Do Now!” (For those that missed it, all the panels are now archived and available to watch – it’s never too late to register and take in the Conference.)

One of the conference highlights was the keynote by John Olson of Gibson Dunn on how to make your presentation to the board about the new rules. Many attendees – including a CEO from Dallas who came to DC to take in both days! – urged us to make John’s remarks widely available as “necessary” viewing for CEOs and directors.

We wholeheartedly agree. We have posted John’s 20-minute video – on a complimentary basis – on the home page of CompensationStandards.com for everyone to see. Please watch John’s inspirational remarks – “John Olson on ‘The Board Presentation’” – and pass on the link to those that need it!

Conference Lessons Learned: What to Do Now

One of the central themes I heard from attendees is that each of the panels drove home the point that much more work will be involved this year putting together the new tables and disclosures; much more than they had originally thought. The mock-up tables and disclosures put together by the panelists really reinforced this point – even plain vanilla situations likely will result in tables that are 4x longer than you might have initially thought. And I challenge anyone who watched “The New Retirement Pay Tables” panel to bravely step forward and say their company can easily overcome all of the complicated open issues that were identified. The same challenge could easily apply to a half dozen other panels.

And the risks for not being prepared have never been greater. Not only do you bear the risk of angering directors and managers for surprising them with huge pay numbers – or even low numbers (eg. perks) – that will embarrass them once disclosed, but you run the very real risk of not capturing all the data you need to provide full disclosure.

And don’t forget that late SEC filings have now become a part of the game that hedge fund activists play, as they buy up bonds of late filers and then use the covenants in indentures to trigger huge defaults/cross-defaults – all in an attempt to put the companies in play! And as we all know by reading the papers, journalists are chomping at the bit for these enhanced disclosures – and investors are not afraid to use them to quickly mount a “just-vote-no” campaign against director nominees. This ain’t the same playing field as last proxy season, my friend! Not by a long-shot.

This is a mini-version of the internal controls exercise we went through over the past few years, just not nearly as comprehensive nor expensive. But another key difference is that most companies simply don’t have the resources they will now need to adopt a new multi-disciplinary approach to drafting compensation disclosures. As panelists repeatedly said, securities lawyers are now going to have to learn much more about compensation – and the HR staff needs to learn securities law. That’s why so many HR professionals attended our just-completed compensation disclosure conference.

So how are the securities lawyers going to learn about compensation? Attend the “14th Annual NASPP Annual Conference” coming up next month in Las Vegas, which has over 40 panels on various compensation issues. If you can’t do that, at least attend the “3rd Annual Executive Compensation Conference” by video webcast – if you listen to John Olson’s video, you should quickly recognize how important it is for lawyers to ramp up their compensation knowledge base as soon as they can. Remember that the “3rd Annual Executive Compensation Conference” is part of the NASPP Conference this year – so you get to attend it free as part of the 40 plus panels (and to cheer you up, there also is a private “Huey Lewis & the News” concert for NASPP attendees).

Consult Your Privacy Lawyer

I had many favorite moments during the Conference, among them was the advice from John Huber that securities lawyers shouldn’t practice privacy law. This was not in the context of the Hewlett-Packard saga, but in the more common context that many of us will now face when implementing updated disclosure controls & procedures and asking management and directors more questions about their finances and relationships.

Speaking of the Hewlett-Packard saga, I have posted the letter from four members of both parties of the House Committee on Energy and Commerce sent to H-P regarding their board investigation in the “Privacy Rights” Practice Area. There is legislation pending – that has been proposed for some time – to prevent the type of unauthorized access to individual phone records that appears to have occurred in the H-P situation (ie. HR 4943, Prevention of Fraudulent Access to Phone Records Act).