July 24, 2012

Our New “Confidential Treatment Requests Handbook

Spanking brand new. Posted in our “Confidential Treatment Requests” Practice Area, this comprehensive “Confidential Treatment Requests Handbook” provides a heap of practical guidance about how to navigate under Exchange Act Rule 24b-2, Securities Act Rule 406 and FOIA Rule 83. This one is a real gem – 48 pages of practical guidance…

Conference Notes: Corp Fin Staff Speaks

In our “Conference Notes” Practice Area, we have posted 4-pages of notes from the “SEC Update” panel – courtesy of Covington & Burling’s Keir Gumbs – from the Society of Corporate Secretaries Annual Conference.

Having Backbone: Compensation Consultant Quits; What’s the Board’s Reaction?

Here is something I blogged today on’s “The Advisors’ Blog“:

Yesterday, Bloomberg ran this article entitled “Best Buy Pay Expert Said to Quit Over Retention Bonuses” about how compensation consultant Don Delves quit his engagement at Best Buy after the company awarded more than 100 managers retention bonuses without tying them to performance. Don has been a regular speaker at our annual responsible pay practices conference. I have not spoken to Don about this situation, but I can imagine quitting a client of Best Buy’s magnitude is not an easy thing to do. One has to make a living.

But it appears Don felt this was the right thing to do. For years, I have been noting how some compensation consultants are standing up to boards – that they are not always the excessive pay facilitator that they sometimes are painted out to be. In fact, I have heard of CEOs who want less pay – but yet their boards give them more because that is what the faulty peer surveys indicate they should do. This is precisely how bad processes have gotten in the way of common sense.

At some point, boards really need to be held accountable. Too many directors think that more conversation in the boardroom means they have done a better job. But there continues to be just incremental change and not the widespread change in pay dynamics that is necessary to overcome decades of bad practices.

If more advisors show more backbone, it might wake up some of the remaining pay apologists out there who spend more time fighting change than being concerned about whether they are engaging in sound governance practices. [I’m still waiting to hear about a lawyer who quits an engagement rather than go along with a bad pay arrangement – all I ever hear about are comp consultants doing this.] And hopefully those advisors who show backbone will be rewarded by being retained by those boards that are truly interested in doing the right thing. Kudos to Don! Now we wait and see if Best Buy’s board gets the message…

– Broc Romanek