March 21, 2011

SEC Budget Fight: Looking Ahead to 2012

The SEC’s ongoing budget battle hit home for me last week, when one night I had a dream that I was still working at the SEC and then was fired due to budgetary constraints (yes, I do sleep on occasion). While two former supervisors fired me in rapid succession, workers turned my office into a storage room (presumably to store whistleblower complaints). I am not sure I want to do any Freudian or Jungian analysis of this dream, but suffice it to say that with government shutdowns being averted at the last minute on a fairly frequent basis, the budget of the SEC and other government agencies remains front and center, perhaps even in the subconscious.

Even while Congress has yet to get its act together for the SEC’s fiscal 2011 appropriation, talk continues regarding the 2012 appropriation for the SEC. In testimony last week before the Subcommittee on Financial Services and General Government of the House Committee on Appropriations, Chairman Schapiro continued the call for a significantly expanded SEC budget in 2012, with a $1.407 billion appropriation that represents a $264 million increase over the continuing resolution level under which the SEC is currently operating. (Note that under Dodd-Frank, the SEC’s appropriation is assured to be deficit-neutral, because the SEC is required to adjust the fee rates so that the amount collected will match the total appropriation – not quite self-funding, but getting closer.)

If the SEC should get its 2012 appropriation, it plans to add a whopping 780 positions, with 60 percent of those positions dedicated toward implementing Dodd-Frank. Outside of Dodd-Frank, Corp Fin would benefit from 37 new positions dedicated toward more frequent disclosure reviews of the largest companies.

With no clear end in sight for the 2011 budget, perhaps the 2012 appropriation is but a dream – and hopefully a dream that ends up better than mine did.

Annual Frequency Pulls Ahead in Say-on-Pay March Madness

If your brackets had predicted “Every One Year” as the winner of the most popular Say-on-Pay frequency selected by stockholders under the Dodd-Frank Act mandated Say-on-Frequency vote (otherwise known as the “final four” choices – one year, two years, three years or abstain), then the news from Mark Borges’s Proxy Disclosure Blog on is looking pretty good to you. In his weekly Say-on-Pay Roundup, Mark notes: “The big news this week is that annual vote recommendations for future “Say on Pay” votes moved past triennial vote recommendations for the first time this year. I logged 225 new filings of proxy statements complying with the shareholder advisory vote requirements of the Dodd-Frank Act.

This brings the total for the year to 739 filings.” While perhaps it is still too early to tell, a stockholder voting trend that has clearly favored an annual Say-on-Pay vote may be influencing the recommendations that boards are making with regard to the frequency of the vote. One recent example that Mark cites which caught my eye is a company where the triennial vote nudged out the annual vote by the narrowest of margins (49.98% for triennial versus 49.36% for annual), but yet the board determined to go with an annual Say-on-Pay vote.

Developments in Debt Restructurings & Debt Tender/Exchange Offers

We have posted the transcript for’s recent webcast: “Developments in Debt Restructurings & Debt Tender/Exchange Offers.”

– Dave Lynn