TheCorporateCounsel.net

In the wake of Corp Fin’s recent sample letter guidance on option backdating, Brink Dickerson of Troutman Sanders recently has been working with the Corp Fin Staff to determine when option dating issues necessitate restatements. He reports that the Staff believes that in applying Question 3 of SAB 108, it is necessary to assess the materiality of the prior period errors under SAB 99 to determine if the errors can appropriately be included in the cumulative effect adjustment. SAB 99, in turn, contemplates assessing materiality on both quantitative and qualitative bases.

Since intent is a factor in assessing qualitative materiality, Brink reports that the Staff doubts that companies will be able to conclude that the errors are not material where the dating errors were intentional on the part of senior management. Certainly there are some errors – e.g., the occassional screw-up in documentation – that would not taint the assessment of qualitative materiality, but the Staff expects that many of the reporting problems that have been disclosed so far will require a restatement.

First Proxy Statements Filed Under New Exec Comp Rules

As Mark Borges has been dutifully blogging about on CompensationStandards.com, the first proxy statements complying with the new executive compensation disclosure rules have been filed, including:

– Kronos Inc.

– Whole Foods Market

– Wrigley Jr. Company

Alan Dye on the Latest Section 16 Developments

For Section16.net and NASPP members, don’t forget to tune into the popular annual webcast tomorrow: “Alan Dye on the Latest Section 16 Developments.”