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Earlier this week, I recounted my shareholder proposal odyssey, and while Homer may not have been impressed, I did receive some very nice feedback on the blog that I greatly appreciate. The submission of the executive compensation disclosure reform rulemaking to OIRA got me thinking about another professional odyssey, my quarter-century association with executive compensation disclosure requirements.

I fortunately get to do a lot of mentoring these days with law students (and the occasional undergraduate student), and one of the consistent themes that I mention to them is that you really have to be open to the possibilities when you are seeking employment or seeking to advance in your career, because often your practice area or your specialty will choose you, rather than you having to chase it. I have met so many lawyers over the years who started out as litigators and ended up as transactional lawyers (or vice versa), because they were open to the possibilities and, when presented with an opportunity, pursued a practice area or specialty that somehow magically chose them. In many ways, this is the story of my long-term association with the SEC’s executive compensation disclosure requirements.

When I left the SEC the first time, I was somehow following the advice that I was going to be delivering in the future, and I was open to the possibilities in private practice. Among the things that I got to do in private practice (beyond sleeping on my office floor using redwells as a pillow) was to be involved in the defense of SEC enforcement actions, which I found to be (mostly) enjoyable work. One high-profile Enforcement investigation that I was assigned to early on in my private practice stint involved allegations of non-disclosure of perquisites, and given my background as a Corp Fin attorney at the SEC, I was assigned the task of taking a deep dive into the history of the SEC’s disclosure requirements around perquisites. To me, it was a particularly exciting assignment, because I could delve back into the history of the Commission’s regulation of disclosure and piece together the rationale for perquisites disclosure, all for the purpose of poking holes in the Staff’s arguments as to why a disclosure violation had occurred. Through the course of this project, I inevitably developed an encyclopedic knowledge of all of the executive compensation disclosure requirements beyond just the narrow topics of perquisites, which proved to be useful when engaged in the more mundane task of reviewing proxy statements.

Fast forward a couple years later, and let’s just say that private practice was not for me (and still isn’t, if I have to be honest), and I had the opportunity to return to the Commission in the Corp Fin Chief Counsel role. As fate would have it, one of the topics on the SEC’s agenda was executive compensation disclosure reform, prompted by angry investors with torches and pitchforks, who were rightfully outraged by the events of Enron, WorldCom, etc. and the ways in which executive compensation had played a role in encouraging such bad behavior. My newly-acquired executive compensation disclosure expertise, combined with the deep subject matter expertise of others in the Division, proved to present the perfect opportunity for embarking on a rulemaking that would change the arc of my professional life. From doing the underlying research, to preparing the term sheet and the releases, and appearing with a person who my son thought was Jack Sparrow on C-SPAN, it was an amazing, wild ride, and I felt proud of the rules that we all worked so hard to create. However, much like Odysseus after vanquishing the Trojans, a series of events related to that rulemaking shortly thereafter brought a close to my SEC career, and sent me on the odyssey that I remain on today. Along the way, thanks to Broc Romanek and Mark Borges, I had the opportunity to co-author The Book about The Rules, which we know today as the Executive Compensation Disclosure Treatise.

While at this point I am not sure that I will ever make it back to Ithaca, I am pleased that, twenty years later, the Commission is going to consider amendments to the executive compensation disclosure requirements that I worked so hard to bring to life. I whole-heartedly agree with the remarks that Chairman Atkins made when the roundtable was announced last year: “It is important for the Commission to engage in retrospective reviews of its rules to ensure that they continue to be cost-effective and result in disclosure of material information without an overload of immaterial information.” I often say (mostly to myself these days) that the executive compensation disclosure requirements have, throughout history, been like a Christmas tree, where you are constantly adding ornaments, but rarely deleting any that have outlived their usefulness. I think now is a good time to do some editing of the ornaments, and we will find out soon what the Commission has in mind.

– Dave Lynn