Monthly Archives: December 2010

December 29, 2010

Breaking News: Reuters Distributes Press Releases in Editorial Feed

I’m trying real hard not to blog this week, but just can’t resist pointing out this excellent piece of investigative journalism by Dominic Jones of IR Web Report about how Reuters is now distributing press releases of its parent company’s corporate clients in its editorial feed to Yahoo! Finance, the world’s most popular investing website.

Not only does Dominic expose this unconventional move, but he proposes a theory as to why Reuters has gone this route – as well as pointing out that “the inclusion of news releases in Reuters’ feed to Yahoo! Finance is also likely to create regulatory headaches for Thomson Reuters’ European corporate clients whose securities are not registered with the SEC and cannot be promoted or sold in the US.”

Although I know many are worried that the demise of traditional mass media will result in the death of investigative reporting, I like to think that the opposite is true – the Web has created thousands of worthy journalists who have the expertise and will take the time to fill the shoes of the many reporters that have been laid off or taken early retirement…

– Broc Romanek

December 23, 2010

Big SEC Filing Fee Hike to (Finally) Become Effective Later Today!

Yesterday, President Obama signed a continuing resolution that will fund the SEC for two more months. In an unusual twist, this resolution states that it is deemed to be the SEC’s “regular appropriation” for fiscal year 2011. Thus, it will trigger changes in the fee rates as noted in this SEC press release.

As a result, effective December 27th, the filing fee rate applicable to the registration of securities will increase from $71.30 to $116.10 per million dollars, a 63% hike as I blogged back when it was first announced. Since tomorrow is a federal holiday – and the SEC is closed – this filing fee hike takes effect after 5:30 pm eastern today (except filings pursuant to Rule 462(b) get the current rate until 10:00 pm eastern).

To track Santa Claus on his travels, you may wish to try the following:

Business-like tracking system map starting at the North Pole

NORAD Santa page

NORAD “Kid’s Countdown” with interactive games and other things

– Broc Romanek

December 22, 2010

The Mighty Holiday Disclaimer: One That Any Lawyer Could Love!

In yesterday’s blog, I noted the heavy volume of electronic holiday cards and I was remiss in not highlighting this hilarious card from Manatt. The whole darn thing is funny – but probably the best part is the disclaimer at the end that I reproduce for you here:

The wishes provided herein represent the sentiment of the sender as of the date written and may not reflect the sender’s sentiments on the date this is first received or anytime thereafter. The sender reserves the right to deny the sender ever wished the recipient wishes, whether warm, cold or any temperature whatsoever. Also, the wishes are not dependent on warmth and may just be wishes, with all of the privileges accorded to the state of wishing, including grandiosity but not excluding practicality. The wish, whether warm, neutral or cold, is under no obligation to come true, but that does not exclude the possibility that it may come true.

A trained eye will recognize that the disclaimer is based on typical safe harbor language pulled from a press release or other writing…and this video ain’t bad either…

– Broc Romanek

December 21, 2010

My New-Fangled Holiday Card: What a Year It Was!

Recently, I have received a slew of e-mailed holiday cards, far more than ever before. While one can chalk that up to popularity, the likely reason is that I subscribe to every list under the sun due to my efforts to pretend to be a reporter. Thanks to those who have sent them – although some wonder whether “should you send holiday cards to analysts and investors?” In return, I offer you a silly video recapping the year (you’ll want your audio turned up for this):

Create your own video slideshow at

And one member notes: In Miracle on 34th Street (1947 version), Susan Walker explained to an associate that she fired Santa Claus because he was crazy. The associate did not want her to fire him and responded with “But… but maybe he’s only a little crazy like painters or composers or… or some of those men in Washington.” I suppose some things are timeless.

– Broc Romanek

December 20, 2010

Another Corporate Poem: “Twelve Days of Christmas”

Friday’s poem on this blog – “Twas Two Weeks Before Quarter’s End” – elicited strong member feedback. Not to be outdone, here is a capital markets poem crafted by Anna Pinedo of Morrison & Foerster:

Twelve Days of Christmas

On the first day of Christmas my lovely client sent to me, A bought deal off an S-3

On the second day of Christmas my lovely client sent to me, Two NDAs and A bought deal off an S-3

On the third day of Christmas my lovely client sent to me, Three ASRs Two NDAs and A bought deal off an S-3

On the fourth day of Christmas my lovely client sent to me, Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3

On the fifth day of Christmas my lovely client sent to me, Five subscription agreements Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3

On the sixth day of Christmas my lovely client sent to me, Six 3(a)(9) exchanges Five subscription agreements Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3

On the seventh day of Christmas my lovely client sent to me, Seven standstills Six 3(a)(9) exchanges Five subscription agreements Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3

On the eighth day of Christmas my lovely client sent to me, Eight fixed-to-floaters Seven standstills Six 3(a)(9) exchanges Five subscription agreements Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3

On the ninth day of Christmas my lovely client sent to me, Nine autocallables Eight fixed-to-floaters Seven standstills Six 3(a)(9) exchanges Five subscription agreements Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3

On the tenth day of Christmas my lovely client sent to me, Ten call spreads Nine autocallables Eight fixed-to-floaters Seven standstills Six 3(a)(9) exchanges Five subscription agreements Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3

On the eleventh day of Christmas my lovely client sent to me, Eleven F/X swaps Ten call spreads Nine autocallables Eight fixed-to-floaters Seven standstills Six 3(a)(9) exchanges Five subscription agreements Four 13-Ds Three ASRs Two NDAs and A bought deal off an S-3, and

On the twelfth day of Christmas my lovely client wired to me, the remainder of this year’s fee.

– Broc Romanek

December 17, 2010

Scorecard: Say-When-on-Pay So Far

It’s still very early in the proxy season but I know many are interested in the proxy statements being filed and what those companies are recommending regarding the frequency of future say-on-pay votes. In his “Proxy Disclosure Blog” on, Mark Borges has been blogging daily about what the most recent say-on-pay resolutions and disclosures look like – and he periodically is tallying up what the frequency recommendations look like so far.

Davis Polk also is tracking the frequency of say-on-pay recommendations internally – and here’s their latest scorecard: “From November 19 through December 16, 2010, we have tracked the frequency of say on pay proposals for 19 companies, including 16 large accelerated filers. Thirteen have recommended triennial votes, one has recommended a biennial vote, and another has recommended an annual vote. One company made no recommendation, indicating that it has decided to consider the views of shareholders before making a determination. The three smaller companies included in our survey all proposed annual votes.”

Unless something major happens over the next two weeks, this blog is taking a rare hiatus. Spend that extra time you will have not reading this blog by taking 30 seconds to cast a vote for us in the ABA’s blog voting contest. Here are voting instructions. Voting doesn’t end until December 31st.

Also don’t forget to renew your membership to this site since all 2010 memberships expire at the end of this month. Looking forward to 2011! Enjoy your holidays…

Twas Two Weeks Before Quarter’s End

Here is something cute penned by Gary Raven of Builders FirstSource:

Twas two weeks before quarter’s end, when all through the company,
Every accountant worked late, preparing spreadsheets while sitting on their rumpy.
Debits and credits all filled the air,
In hopes that outside auditors would be acutely aware.

Most employees were into their third pitcher laughing at the bar,
While fantasies of raises and bonuses were coupled with dreaming of a shiny new car.
And the CFO in his green-visor and the Controller in his as well,
Knew nothing could replace their swiftly dwindling brain cells.

In the computer room there came such a sudden smell,
Were too many cached files burning, no one could tell.
The CIO made a run to the processor room,
Throwing the switch on the exhaust fan to avoid any doom.

The wisps of smoke could barely conceal,
The visage of something with which the mind had to deal.
When to the door the creature stepped into his dominion,
To reveal it was St. Sox and eight beleaguered minions.

Omnipresent, thorough and replete,
Everyone knew it would be difficult to compete.
Onward with bureaucracy, forward they came,
As St. Sox called them each by name.

Now Sarbanes! now Oxley! Now Tyco and Enron!
On Greenspan! On 404! On Arthur and Anderson!
Take general accounting and turn it on its head,
Make small companies wish they were dead!

As each measure resulted in more and more invented controls,
It became difficult to know which way a company could roll.
So to the accounting department St. Sox did go,
With all his minions, measures, cures, and fixes in tow.

With flurry and bravado he sat down to work,
Telling each employee to not understand was to be a jerk.
He pointed his fingernails to his book,
Exclaiming that to comply, all they had to do was look.

On to his head he placed two Bluetooth devices against each ear,
And when he was plugged in he was in great cheer.
His IPODs were maxed with memory and band,
So that today’s case law was held in his hand.

A fanciful mirth replaced his mood, previously dreary,
He would show how compliance need not be teary.
With slickened hair greasy with pomade,
He just knew he had come to their aid.

His Italian suit, pleated in the back,
Cast a pall against the minions dressed off the rack.
Of bad breath and teeth of yellow,
He did not make his companions feel mellow.

As his LED screen turned on its light,
Perhaps we thought he really may be bright.
Importing the data he turned to his right,
Saying that Maestro was about to help their plight.

He spoke not a word but went right to work,
Then made all the printers go berserk.
“See there is the proof of the matter,”
The gleeful proclamation silencing all chatter.

“For a yearly retainer I can show you the ropes,
You’ll pass all audits until new laws hit the books.”
With that, the accounting department, not meaning to be redundant,
Hung him with a rope and placed him next to all the other consultants.

– Broc Romanek

December 16, 2010

A “Wow”: Corp Fin Allows Exclusion of Golden Parachute Shareholder Proposal

I just learned of this recent Corp Fin no-action response to Navistar, in which the Staff allows the company to exclude a proposal from the Teamsters General Fund. This shareholder sought inclusion of a proposal for shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding 2.0x the sum of salary plus bonus.

The Staff response relies on Rule 14a-8(i)(10) to permit exclusion on the basis that the company will soon substantially implement the proposal because the company intends to include a say-on-golden-parachute vote as part of its say-on-pay vote for the upcoming proxy season (thus, taking advantage of the Dodd-Frank “exception” that allows for this combination).

Among other arguments, the shareholder unsuccessfully argued that the SEC’s pending say-on-pay rule proposal would render shareholder proposals seeking a more specific vote on particular elements of compensation non-excludable. The shareholder also argued that giving shareholders a triennial vote on the entirety of executive compensation practices is different than giving shareholders an opportunity to weigh in on a company paying out 2x salary and bonus as a severance package.

Interestingly, a few months back, Navistar settled a SEC Enforcement action regarding years-long accounting fraud (see this article). The CEO Dan Ustain that presided over this alleged fraud was the subject of a relatively rare Section 304 clawback action from the SEC – but he still runs the company (see this blog from Francine McKenna). Thus, one can understand why shareholders might want to limit the severance packages at this company.

I haven’t had time yet to confer with the usual shareholder proposal experts to fully analyze this development – but will do so and provide some gloss on this after the holidays…

SEC Proposes Disclosure Rules on Conflict Minerals, Mine Safety and Resource Extraction

Just writing the title for this entry feels strange. “Conflict minerals”? “Mine safety”? Is it April Fool’s Day? Anyways, the SEC released these three proposing releases after yesterday’s open Commission meeting:

Conflict Minerals
Mine Safety
Resource Extraction

By the way, we have posted a great conflict materials flowchart – one that can be used by lawyers to explain to management how the Dodd-Frank provision works – courtesy of Melissa Greenspan of Owens Corning.

Data Handling & Digital Forensics

In this podcast, John Reed Stark of Stroz Friedberg discusses how to handle important data, including:

– What do you perceive as the greatest threat to companies when it comes to their data?
– What do you do if you’re “hit” by a data breach?
– What is a “bad leaver”?
– What sort of data can you uncover from a “forensic deep dive”?

– Broc Romanek

December 15, 2010

Say-on-Pay: What Four Frequency Choices Looks Like

A few days ago, I blogged on’s “The Advisors’ Blog” about a sample voting instruction form to illustrate how the four frequency choices can be displayed on a proxy card (note the names of the directors). Mike Andresino of Posternak Blankstein & Lund weighed in that if management is recommending triennial as the frequency, then instead of ordering the choices, reading left to right, as “1-yr / 2-yr / 3-yr / abstain,” he would put the one the company wants first, like this: “3-yr/ 2-yr /1-yr / abstain” (this obviously would be tricky if management recommended biennial).

I confirmed with Broadridge that their systems could indeed process this type of change in order for all of its voting formats: paper, telephone,, and ProxyEdge. Whether transfer agents and tabulators can handle that remains to be seen.

And don’t forget that Mark Borges is maintaining a daily recap of the latest proxy statement filings and a scorecard of what frequency companies are recommending in his “Proxy Disclosure Blog.”

I am wrapping up the Winter 2011 issue of the Compensation Standards newsletter that will be posted right after New Year’s Day (available to all 2011 members of This issue will contain more practical guidance on say-on-pay preparation, supplementing the July-August 2010 issue of The Corporate Counsel that I wrote a few months back. One topic I tackle is what you need to check now to ensure that Broadridge’s systems work properly with other players in the meeting process so that tabulation is done correctly.

Since all memberships expire at the end of this month, renew now to receive this issue as soon as it’s out. Or try a no-risk trial if you are not yet a member to receive this issue as soon as it’s up.

The SEC’s Enforcement Logo: Now You See It, Now You Don’t

For a few months, the SEC’s home page contained an Enforcement “stamp” symbol, essentially an icon for the Enforcement Division. This icon was prominent on the upper right-hand corner of the home page, with links to the Division’s “headline” cases. Personally, I never understood why the Enforcement Division needed to be branded separately from the SEC itself – so I’m happy to see that iall has now disappeared.

An In-House Guide to Internal Investigations

In this podcast, Dan Bookin of O’Melveny & Myers explains his firm’s new handbook on internal investigations entitled, “In-House Counsel’s Guide to Conducting Internal Investigations“:

– Why did the firm write the guide?
– Should in-house counsel consult the guide when a need for an internal investigation arises? Or is that too late?
– What are your favorite pieces of guidance in the guide?

– Broc Romanek

December 14, 2010

Survey Results: More on Compensation Committees and Compensation Consultants

Here are the survey results from our most recent Quick Survey, repeated below (compare to an identical survey we conducted three years ago):

1. Does your compensation committee:

– have a policy that it will not employ any compensation consultants who perform services for management – 30%
– not have such a policy, but does not intend to employ any of the same compensation consultants as management – 50%
– employ some (or all) of the same compensation consultants used by management – 20%

2. In practice, how does your compensation committee go about hiring an expert for making recommendations regarding CEO compensation?

– Management offers up a consultant to the compensation committee that it finds acceptable, subject to committee approval – 55%
– Compensation committee left completely on its own to find and hire whatever consultant it wants – 40%
– Compensation committee has not hired an expert for setting CEO compensation – 4.9%

3. Assume the company already is using consultant A for general compensation advisory purposes, will your compensation committee:

– Use the same consultant to help set executive compensation – 10%
– Use a different consultant to help set executive compensation – 70%
– Too early to tell what the compensation committee will do going forward – 20%

4. Regarding compensation committee charters, the committee has:

– A charter that states that the compensation committee will be the sole entity in the company to hire compensation consultants specifically related to CEO compensation – 80%
– A charter that states that both the compensation committee and management have the authority to hire compensation consultants specifically related to CEO compensation – 0%
– A charter that does not address who hires compensation consultants – 20%

Please take a moment to participate on this “Quick Survey on Regulation FD Practices.”

Social Media Within IR Web Pages

In this podcast, Darrell Heaps of Q4 Web Systems explains how companies can incorporate social media elements within their IR web pages, including:

– What is the Q4 platform?
– How is social media integrated into the platform?
– Can you give an example of a company using your platform so folks can see what it looks like?

More on our “Proxy Season Blog”

With the proxy season gearing up once more, we are posting new items regularly on our “Proxy Season Blog” for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– U.S. Proxy Season Review: Withhold Votes
– Is ISS Too Powerful?
– Seven Smart Practices for Shareowner Meetings
– Symantec Done With All-Virtual Shareholders Meetings
– Tabulators in the News

– Broc Romanek

December 13, 2010

The ABA Blawg 100: We Still Need Your Help

As I blogged last week, we are in the midst of a voting campaign among the ABA Journal’s Blawg 100. We’ve moved up to 4th place, behind two intellectual property blogs and the SCOTUS blog. We really need your support. If you value what you read all year long here, please repay us with 30 seconds of your time.

To help you navigate the ABA Journal’s voting framework, here are the steps you need to take:

a. If you voted last year:

1. You likely need to recover your password by simply inputting your email address. You will promptly receive an email with your password and screen name in it.

2. Once you have your password, you should login to their site

3. Once logged in, go to the “Niche” category and scroll down to Blog (it’s second from the bottom) and click on the “Vote” symbol to the left of that. Thanks!

b. If you didn’t vote last year:

1. Register to vote – it’s free. You don’t have to be an ABA member to vote nor do you even have to be a lawyer. When you pick a password, it must be at least 5 characters long (but it can be any 5 characters – eg. 11111). If you’re an ABA member, your ABA id/password won’t work for the ABA Journal’s site unfortunately as they are separate.

2. Once you activate your registration by clicking on the link emailed to you, you should login using the screen name and password that you picked when you registered.

3. Once logged in, go to the “Niche” category and scroll down to Blog (it’s second from the bottom) and click on the “Vote” symbol to the left of that. Thanks!

Here is this year’s promotional video that I taped during a conference in Chicago last week. It reflects the lethargic mood of our community during this year’s campaign – if we received the number of votes that we had last year, we would win again handily. Compare to last year’s promotion. If you’re having troubles voting, please shoot me an email and let me know and I can help you. Thanks for the support!

Corp Fin Fills Some Leadership Positions

Last week, Corp Fin announced the following promotions:

– Amy Starr, Chief, Office of Market Trends
– Kathy Hsu, Chief, Office of Structured Finance
– Mike McTiernan, Assistant Director, AD8 Real Estate and Business Services
– Amanda Ravitz, Assistant Director, AD10 Electronics and Machinery
– Suzanne Hayes, Assistant Director, AD12 Financial Services (this is the new 2nd financial services group that is not officially named yet)

We’ve updated our “Corp Fin Organization Chart.” Congrats to all five, it’s been quite a while since an Assistant Director slot was open so I know those spots were widely coveted…

Proxy Access Lawsuit: Two Amicus Curiae Briefs Filed

Last week, two amicus curiae briefs were filed in the lawsuit filed by the Business Roundtable and US Chamber of Commerce against the SEC’s proxy access rule – these briefs from the State of Delaware and the Investment Company Institute were filed in support of the plaintiffs. This is in addition to the initial brief filed by the plaintiffs a few weeks ago.

Meanwhile, the United Brotherhood of Carpenters’ approach to access this season is a letter writing campaign to 100 companies, where the union is seeking access to the company’s nominating committee. In addition, this union is still seeking triennial votes for say-when-on-pay, as noted in this comment letter from Ed Durkin to ISS.

– Broc Romanek