TheCorporateCounsel.net

February 5, 2008

The Latest on the SEC

Catch tomorrow’s webcast – “The Former SEC Staff Speaks” – to hear former SEC Senior Staffers Marty Dunn, John Huber and Brian Lane join me in a discussion of the latest rulemakings – and interpretations – from the SEC. This webcast will provide a complete “bring-down” of what’s happening at the SEC – and provide practical guidance about what you should be doing as a result. Among the topics are:

– Shareholder access
– New types of shareholder proposals
– PIPEs enforcement cases
– SEC financial reporting developments
– XBRL and more…

Course Materials Now Available: As part of this webcast, you will want to review these Course Materials that relate to “materiality” determinations.

Potential Proxy Solicitation Relief for Delinquent Filers

In our November-December 2007 issue of The Corporate Counsel, we mentioned that the Staff was considering how to provide relief for reporting issuers that must defer their annual meeting because reporting delinquencies or a pending restatement makes it impossible to comply with Rule 14a-3’s requirement to deliver financial statements when soliciting proxies. Yesterday, the SEC published an adopting release for an amendment to its delegation of authority rules that will now permit Corp Fin to consider one-off exemptive applications in these circumstances.

Prior to this rule change, Corp Fin would listen to the concerns of issuers facing these problems, but indicate that it did not have the authority to do anything to help them out – now, Corp Fin will be able to formally consider an issuer’s specific request for exemptive relief from the requirements of Rule 14a-3(b) or Rule 14c-3(a).

While there is not likely to be a flood of these sorts of applications, it will certainly be something that can be used when an issuer finds itself stalled out in its SEC reporting due to a restatement or internal investigation – particularly when hostile shareholders are at the door demanding an annual meeting.

More Executive Compensation Inquiries

Some of the larger companies that have recently wrapped up their executive compensation comment process with Corp Fin now have a new inquiry to deal with – this time from the House Oversight and Government Reform Committee, chaired by Henry Waxman (D-CA). The Committee announced last week that it had sent letters to the compensation committee chairs of each of the Fortune 250 companies, requesting information about how those companies utilize compensation consultants in setting executive pay. As I noted in the blog back in December, the same Committee’s Majority Staff recently released a report raising concerns about potential compensation consultant conflicts of interest. Apparently that was not the end of the story, because the Committee indicates that its investigation into the role of compensation consultants in setting executive pay is ongoing.

The Committee’s questions focus on areas such as: (i) the retention of consultants; (ii) the parties to whom the consultant reports; (iii) the other services performed by the consultant; (iv) disclosure about the role of the compensation consultant; and (v) whether the company has a written policy about the other services that an executive compensation consultant can perform for the company. The Committee is expecting responses back by February 22, 2008.

– Dave Lynn