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Here’s the results from our recent survey on compensation committee minutes & consultants:

1. When it comes to providing comp committee minutes to consultants, our company:
– Provides upon request in electronic form only – 41%
– Provides upon request in paper form only – 5%
– Provides upon request in both electronic & paper form – 11%
– Doesn’t provide – but does allow inspection onsite – 25%
– Doesn’t provide – nor allow inspection onsite – 18%

2. Our compensation consultants ask for copies – or inspection – of committee minutes:
– Prior to each meeting – 12%
– Once a year – 4%
– On irregular basis – 25%
– They never ask for them- 59%

Please take a moment to participate anonymously in these surveys: “Quick Survey on Reg FD Policies & Practices” – and “Quick Survey on Board Approval of 10-K.”

EGCs: How to Count to $1 Billion

Section 2(a)(19)(C) of the Securities Act says that a company can lose “emerging growth company” status by issuing more than $1 billion in non-convertible debt over a rolling 3-year period.  This MoFo blog reviews what counts – and what doesn’t – when determining whether you’re over the limit.  This excerpt addresses the treatment of asset-backed securities:

In calculating whether an issuer exceeds this $1 billion debt limit, the SEC Staff has interpreted all non-convertible debt securities issued by an issuer and any of its consolidated subsidiaries, including any debt securities issued by such issuer’s securitization vehicles, to count against the $1 billion debt limit.  As a result, asset-backed securities that are considered non-recourse debt and consolidated on a parent issuer’s financial statements for accounting purposes should be included when calculating the applicability of the $1 billion debt limit.

Issuers do get to exclude debt issued in an A/B exchange offer, since this involves simply replacing those securities with ones that are identical in all respects – except for their registered status.

Audit Reports: “Dear Audit Committee Member”

This recent blog from Davis Polk’s Ning Chiu provides a good example – in the form of a “Dear Audit Committee Member” letter – of a user-friendly way to communicate with directors about the PCAOB’s decision to modify the form of the auditor’s report to address “critical audit matters.”

– John Jenkins