December 13, 2013
Nasdaq Comp Committee Independence Changes Effective Now
I thought that I should clarify my blog from last week – when Nasdaq filed the compensation committee independence proposed rule changes on November 26th, they were immediately effective. Two days ago, the SEC published the notice of filing and immediate effectiveness of the proposed rule change.
As noted in Section III of the notice (pp. 9-10), the rule change has a 30-day operative delay from the date of filing. That period will expire before companies are required to comply with Nasdaq’s compensation committee composition rules since the transition period for compliance is unchanged. Specifically, companies must comply by the earlier of: (i) their first annual meeting after January 15, 2014, or (ii) October 31, 2014.
In addition, at any time within 60 days of the filing of the proposed rule change, the SEC summarily may temporarily suspend such rule change if it appears to the SEC that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Exchange Act. I have no expectation that they would take such action. I have posted memos on the Nasdaq’s changes in CompensationStandards.com’s “Compensation Committee” Practice Area.
Corp Fin’s Focus on Segment Reporting
This WSJ article notes (as highlighted in this Cooley news brief) covers the recent AICPA’s conference and notes how Corp Fin’s Associate Chief Accountant Ryan Milne said that the Division was focusing on segment reporting. [The SEC Staff’s first few speeches from the conference are posted. More likely to come.]
According to the article, segment reporting was “the third most common area discussed in SEC comment letters in the first three quarters of this year, following tax and goodwill accounting issues, according to Audit Analytics. In its regular review process, the agency addressed segment reporting issues in some 435 letters to 184 companies this year through Sept. 30, according to the firm.” An SEC representative stated that the SEC expects to “continue to focus on this area.”
By the way, the comment period for the PCAOB’s proposal on the audit report has closed – here are the comments that the PCAOB received…
SEC Task Force Probes Use of Non-GAAP Metrics
And this WSJ article notes (as highlighted in this Cooley news brief) that the SEC’s Enforcement Division – using its 12-member “Financial Reporting and Audit Task Force” created in July – is scrutinizing companies’ use of non-GAAP performance measures.
– Broc Romanek