June 5, 2008
Lynn & Romanek’s “The Executive Compensation Disclosure Treatise & Reporting Guide”
Okay, you now know why Dave and I haven’t been making silly videos lately – we have been busy jamming on a comprehensive treatise of executive compensation disclosures – Lynn & Romanek’s “The Executive Compensation Disclosure Treatise & Reporting Guide” – so that we can get it into your hands by Labor Day. This thing will be massive: over 1000 pages and is full of explanations, annotated sample disclosures, analysis of possible situations that you may find yourself in, etc.
After you order the Treatise, you will also receive quarterly Update newsletters – so that we can give you the latest practice tips at the crucial moments you need them. And once the Treatise is done, those that order the hard copy also get access to an online version of the Treatise (and newsletters). We haven’t yet figured out the URL for the online version – suggestions are welcome. Here are FAQs about the Treatise.
Order your Treatise now so we can rush it to you right after Labor Day; there is a reduced rate if you are attending any of our Conferences. Order online – or here is an order form if you want to order by fax/mail. If at any time you are not completely satisfied with the Treatise, simply return it and we will refund the entire cost.
Completed the Set: The SEC Staff’s Executive Compensation Comment Letters
As the Corp Fin Staff has nearly finished uploading the 350 comment letters from its executive compensation review project last Fall, we have put the finishing touches on providing links to all the comment letters and responses in the CompensationStandards.com “SEC Comments” Practice Area. Thanks to Dave for the heavy lifting on this one. Note that it might be missing one or two…
RiskMetrics’ “Explorations in Executive Compensation”
Recently, RiskMetrics has put out a draft – and lengthy – set of white papers entitled “Explorations in Executive Compensation.” The project is intended to spark constructive dialogue about executive pay issues and I really encourage you to read their papers and provide comments.
The first white paper – “Considerations” – defines and puts into context the basic elements of U.S. executives’ pay packages, with special attention paid to emerging key considerations for investors in evaluating pay and equity plans in particular. The second one – “Innovations” – offers a pair of new methods of looking at critical issues in executive pay: peer group benchmarking and and the degree of alignment between the risks borne by investors and by shareholders.
SEC Petition: Disclosure about Consultant Conflicts
As I prepare to speak at a director’s college next week on executive pay, I read this recent petition from a group of 21 large institutional investors to the SEC that seeks to require companies to disclose all fees associated with consultant engagements for a single company and any ownership interest a consultant working for the compensation committee may have in the parent consulting firm. This disclosure would be made in proxy statements.
I’m still not convinced that consultant conflicts routinely impact CEO pay levels – and I definitely believe there are many other areas in the CEO pay process that are in greater need of fixing, with a much higher priority. Here is some food for thought – a recent study that concludes that potential conflicts of interest between companies and consultants are not a primary driver of excessive CEO pay (note there are studies that have opposite findings).
– Broc Romanek