October 20, 2017

Edgar Woes Piling Up? Fee Problems & Delayed Offering Filings?

The title of this blog includes multiple question marks because the SEC continues to keep us in the dark when Edgar has problems. I’m not talking about the cyber breach that was recently announced. I’ve been harping for some time that the SEC needs a blog – or some type of other vehicle – to inform the public when Edgar is experiencing problems (and when those problems are resolved). Go back to my March blog entitled “Edgar is Down? (Crickets)” – or this one from a year back from that: “EDGAR is Down”: A Familiar Refrain?

This is not just my pet peeve. Here’s a note that I received yesterday from a member:

We’ve had problems over the last few days with a couple of Edgar filings that were hung up apparently due to fee processing problems. A quick search for S-1 filings today shows the first five S-1 filings all being time-stamped within a fifteen minute period starting around 3:12 pm today, which strongly suggests a systems problem. I’ve talked to several financial printers and gotten confirmation that other law firms were seeing the same filing problems with fee-required filings yesterday and today. I wonder if this is related to the hack – or just outdated systems. Can you blog about this so you can gather feedback from others.

As of this morning, Edgar is still having trouble accepting filings – the third day in a row. Apparently, this is affecting every deal that’s trying to price & launch. It’s a bit sad that I’m being asked to gather information from the community so that we can figure out what is happening with Edgar. It happens a lot. And the SEC could easily solve this problem by communicating with us as I’ve blogged about many times…

Pay Ratio: Glass Lewis’ Approach

In this note, Glass Lewis has joined the many who have written about the SEC’s new guidance on pay ratio (we’re posting memos about that in our “Pay Ratio” Practice Area). In addition to summarizing the SEC’s guidance, Glass Lewis indicates what approach it will take for pay ratio in this excerpt:

Glass Lewis intends to display the pay ratio as a data point in our Proxy Paper in 2018. At this time, however, we do not intend to incorporate the pay ratio into our assessment and analysis of Say-on-Pay proposals. We recognize that this data point might provide valuable additional information to shareholders on a company’s pay practices; however, we do not believe that this information is material for our analyses of the structures by which, and the disclosures of how, companies pay their NEOs.

By the way, for those registered for our “Pay Ratio & Proxy Disclosure Conference,” the video archives for Wednesday’s panels are now posted…

ISS Survey: Director Comp & Gender Pay Gap

Yesterday, ISS released this 23-page summary from its 2017-2018 policy survey. This year, survey topics were split into two parts, with an initial, high-level survey covering a small number of fundamental and high-profile topics. Here’s two of the pay-related findings for the US:

Director Pay – Survey respondents were asked which factors should be considered in determining whether a director pay program presents a governance concern with respect to high pay magnitude. Tops for investors was measuring director pay relative to a four-digit GICS peer group, followed by stock market index peers, and, third, measuring a director pay program relative to all companies. Corporate respondents, meanwhile, deemed the measurement of pay relative to a stock market index most appropriate, followed next by pay measurements relative to a four-digit GICS industry peer group. When asked which factors should be considered in determining whether a pay program presents a governance concern with respect to problematic pay structure, both groups agreed that excessive perquisites was most problematic.

Gender Pay Gap – Over the past two years, shareholders have filed proposals asking for a report on gender pay equity at numerous U.S. companies. ISS’ survey asked whether companies should be disclosing their gender pay gap information, with 60 percent of investor respondents answering affirmatively, compared with 17 percent for corporates. Of the just over one-quarter (27 percent) of investor respondents suggesting the need for such disclosures would “depend” on certain considerations, most indicated they would deem it favorable if the practice became an industry norm and/or the company was lagging its peers.

Read more about the survey results in this Weil Gotshal blog

Broc Romanek