Tomorrow on CompensationStandards.com at 2:00 pm Eastern, join us for the webcast – “The Top Compensation Consultants Speak” – to hear Blair Jones of Semler Brossy, Ira Kay of Pay Governance and Jan Koors of Pearl Meyer discuss the latest considerations for compensation committees. The panel will cover the following topics:
– DEI Programs, Disclosures & Metrics: The Compensation Committee’s Role
– Plan Design & Goal Setting Amid Uncertainty & Volatility
– Key Changes in Investor & Proxy Advisor Policies & their Impact in 2025
– Metrics & Perks: Notable Observations from the 2025 Proxy Season So Far
– Compensation-Related Shareholder Engagement
– Did Dodd-Frank Rules Reduce or Curb CEO Pay or Change Incentive Design?
Members of CompensationStandards.com are able to attend this critical webcast at no charge. If you’re not yet a member, subscribe now. The webcast cost for non-members is $595. You can sign up by credit card online. If you need assistance, send us an email at info@ccrcorp.com – or call us at 800.737.1271.
We will apply for CLE credit in all applicable states (with the exception of SC and NE which require advance notice) for this 1-hour webcast. You must submit your state and license number prior to or during the live program. Attendees must participate in the live webcast and fully complete all the CLE credit survey links during the program. You will receive a CLE certificate from our CLE provider when your state issues approval; typically within 30 days of the webcast. All credits are pending state approval. This program will also be eligible for on-demand CLE credit when the archive is posted, typically within 48 hours of the original air date. Instructions on how to qualify for on-demand CLE credit will be posted on the archive page.
Earlier this month, SEC Chairman Paul Atkins held a town hall for agency staffers in which he addressed the magnitude of the cuts resulting from the SEC’s voluntary buyout program. Chairman Atkins said that headcount had decreased by 15% since the current fiscal year began last October. He also said that at its height last year, the SEC had a total of 5,000 employees and 2,000 contractors, and that today it is down to approximately 4,200 employees and 1,700 contractors.
Chairman Atkins didn’t specify the extent to which particular offices and divisions were impacted by staff departures, but a couple of Reuters reporters did a little digging via FOIA and came up with their own numbers. According to their reporting, the Office of the Chief Counsel took the biggest hit, with nearly one in five staffers (19.5%) departing! Investment Management (16.7%), Trading and Markets (14.7%), and Enforcement (13.0%) were also hit hard. Corp Fin did relatively better, with only 8.7% of its staff opting to head for the exit.
There may be more cuts to come, because Reuters points out that DOGE has not left the building:
The SEC has been continuing its belt-tightening efforts, with more than 20 employees taken off regular duties in recent days and reassigned to full-time contract reviews to identify further possible opportunities to cut costs, principally in IT services, according to two people with knowledge of the matter, who said this was part of the SEC’s cooperation with billionaire Elon Musk’s Department of Government Efficiency.
DOGE, which has been working to find cost cuts at various agencies including the SEC, has expanded its footprint at the agency’s Washington headquarters, moving from one to at least three dedicated rooms as activity ramps up, according to one of the people and a third person with knowledge of the matter.
How all of this is going to affect the SEC’s day-to-day operations remains to be seen. In his remarks at the town hall, Chairman Atkins indicated that at least some of the vacancies created by these departures will be filled, but even so, that’s a lot of staffing losses to absorb by one of the few agencies that actually makes taxpayers money.
In December 2023, FASB finalized ASU 2023-07, which made changes to segment disclosure requirements. Calendar year companies became required to follow the new guidance beginning with their Form 10-K filed in 2025. The CAQ’s summary of its SEC Review Committee’s March 2025 meeting with the Corp Fin staff indicates that compliance with ASU 2023-07 is high on the staff’s review agenda. It also offers some guidance to registrants on drafting these disclosures:
The staff also commented on the implementation of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, noting that they are reviewing disclosures for compliance and will comment where appropriate. The staff reminds registrants that they are not precluded from disclosing additional measures of segment profitability used by Chief Operating Decision Maker (CODM) in assessing performance and allocating resources in accordance with ASC 280-10-50-28A through 28C. However, any additional reported measures of segment profit or loss that are not calculated using measurement principles consistent with the corresponding measure presented in a registrant’s consolidated financial statements prepared in accordance with U.S. GAAP should be identified as non-GAAP measures and must comply with the SEC’s non-GAAP regulations, rules and guidance.
Although Item 10(e) of Regulation S-K includes a general prohibition against the inclusion of non-GAAP measures in the financial statement footnotes, the staff will not object to additional measures of segment profitability disclosed in accordance with ASC 280-10-50-28A through 28C being included in the notes to the financial statements, provided they otherwise comply with the non-GAAP rules.
The staff also indicated that reviewers are keeping an eye on disclosures about generative AI activities and comparing those disclosures to what companies are saying outside of SEC filings.
Traditionally, accredited investor status for individuals has been based on wealth or income. Last week, a bipartisan group of lawmakers introduced legislation that would provide an alternative path to accredited investor status. The bill, which is titled “The Equal Opportunity for All Investors Act of 2025,” would allow individuals to become accredited investors by passing a test that the SEC would be required to come up with within a year of its passage. The legislation would require that test to be “designed with an appropriate level of difficulty such that an individual with financial sophistication would be unlikely to fail.”
If this sounds familiar, it may be because the same bill was introduced during the last session of Congress. The legislation was passed by the House but died in the Senate. However, with capital formation a priority for the Trump administration and the SEC signaling a desire to make it easier for retail investors to purchase securities in exempt offerings, it may have a better shot in the current session of Congress.
There’s a lot here, but here are a few high-level takeaways from the alert:
– DOJ Criminal Division will prioritize investigating and prosecuting corporate crime in ten “high-impact areas.”
1. Waste, fraud, and abuse, including healthcare fraud and federal program and procurement fraud
2. Trade and customs fraud, including tariff evasion
3. Fraud perpetrated through variable interest entities (VIEs), including, but not limited to, offering fraud, “ramp and dumps,” elder fraud, securities fraud, and other market manipulation schemes
4. Fraud that victimizes US investors, individuals, and markets including, but not limited to, Ponzi schemes, investment fraud, elder fraud, servicemember fraud, and fraud that threatens the health and safety of consumers
5. Conduct that threatens the country’s national security, including threats to the US financial system by gatekeepers, such as financial institutions and their insiders that commit sanctions violations or enable transactions by cartels, TCOs, hostile nation-states, and/or foreign terrorist organizations (FTOs)
6. Material support by corporations to FTOs, including recently designated cartels and TCOs
7. Complex money laundering
8. Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act (FDCA), including activities related to fentanyl production and unlawful distribution of opioids by medical professionals and companies
9. Bribery and associated money laundering that impact US national interests, undermine US national security, harm the competitiveness of US businesses, and enrich foreign corrupt officials; and
10. Digital asset-related crimes, including ones that (1) victimize investors and consumers; (2) use digital assets in furtherance of other criminal conduct; and (3) involve willful violations that facilitate significant criminal activity.
– The DOJ Criminal Division’s amended Corporate Enforcement Policy aims to provide more transparency and enhanced incentives to companies that self-disclose and cooperate.
– DOJ Criminal Division commits to streamlining corporate investigations.
The “Galeotti Memo” and the path to declination under the Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) were frequently cited developments during yesterday’s Securities Enforcement Forum West. Here are a few comments from the “Masterclass I: Managing a True Corporate Crisis, Major Internal Investigation and/or Whistleblower” panel that I found interesting:
– Priority number nine above looks surprisingly like an FCPA issue given the announced enforcement pause on that front.
– The updated approach to self-reporting seems encouraging, especially the suggestion that the DOJ might still give some cooperation credit for corporate self-reporting even if the DOJ was already aware of potential wrongdoing from another source.
This excellent LinkedIn Newsletter from Persefoni’s Kristina Wyatt reminds us that climate disclosures in SEC filings aren’t totally dead. Requirements live on in the form of Items 101 (Description of Business), 103 (Legal Proceedings), 105 (Risk Factors) and 303 (MD&A) of Regulation S-K — plus the 2010 interpretive release. (History buffs should check out the newsletter’s timeline for SEC environmental and climate disclosure developments!)
Even though the 2010 guidance is the SEC’s last official statement on climate before the 2024 rule, other developments are worth noting. First, Reg. S-K has been amended since, which just means that you have to “read the 2010 climate guidance in the context of the amended items,” which didn’t change “the essential proposition” of the 2010 guidance. Second, and more importantly, she notes that the “broader landscape for climate-related disclosures has changed” — with many new standards and requirements.
Particularly, she points to ISSB’s S1 and S2, which multinational companies may be complying with currently — or required to in the near future. She says companies facing material climate risks or events can look to these standards as they apply the 2010 guidance. To do that, Kristina provides this helpful roadmap linking S1 and S2 to required SEC disclosures.
Business Description – Item 101 of Regulation S-K. A company might adjust its business strategy to mitigate climate risks or take advantage of climate-related opportunities. If those changes reflect a material change to the company’s business, the company must consider disclosure of those changes in its business description and/or MD&A. Its assessment of its strategy under the guidance of the ISSB standards can help the company formulate its plan and, in turn, its disclosure.
Moreover, as the 2010 interpretive release provides, Item 101 of Regulation S-K requires companies to discuss “The material effects that compliance with government regulations, including environmental regulations, may have upon the capital expenditures, earnings and competitive position of the registrant and its subsidiaries, including the estimated capital expenditures for environmental control facilities.” The evaluation of a company’s legal compliance obligations as part of its ISSB assessment of transition risks and strategy can help shape the company’s disclosure under Item 101 of Regulation S-K.
Legal Proceedings – Item 103 of Regulation S-K. Item 103 requires disclosure of material legal proceedings, including “administrative or judicial proceedings arising under any Federal, State, or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment.” Ordinary, routine litigation incidental to the business need not be disclosed.
However, Item 103 presumes that proceedings are not ordinary or routine if they are brought by a government entity and involve potential penalties above specified thresholds as described in Item 103. Just as the company’s disclosures related to its business under Item 101 of Regulation S-K ties to is ISSB risk and strategy disclosures, so too should the Legal Proceedings disclosures under Item 103 be aligned with the company’s disclosure of its risks and strategy under ISSB S2.
Risk Factors – Item 105 of Regulation S-K. Many companies will consider whether climate risks represent material risks that they should disclose in their Risk Factor section. They can usefully draw on the ISSB standards in evaluating their acute and chronic physical and transition risks and their strategies to mitigate those risks. This can help inform their Risk Factor disclosures, including disclosure of how climate risk affects the company.
MD&A – Item 303 of Regulation S-K. Climate events and risks should be disclosed in a company’s MD&A if they represent material events and uncertainties that are reasonably likely to cause the company’s reported financial information to not necessarily be indicative of future operating results or financial condition. This includes matters that have had a material impact on reported operations as well as those reasonably likely to have a material impact on future operations. The company’s assessment of its physical and transition risks and strategies to address those risks, conducted pursuant to ISSB S2 can help to inform its MD&A disclosure.
My husband’s biggest hobby is something most people have never heard of. It’s called “24 Hours of Lemons.” It’s endurance racing (like Le Mans) but for cars that frankly don’t look roadworthy (hence Lemons). Most teams are amateur racers and engineers, and most of the cars are somewhat cobbled together. My husband’s team’s car is an extreme example. It’s truly Frankenstein’s monster — a 45-year-old Triumph Spitfire body with a Triumph GT6 roof and a Ford Ranger engine under the hood — and the judges seem to love them for it.
The race they compete in annually just happened, and even though, with two kids in tow, I usually only last about an hour watching (and the car is sometimes broken for all or part of that time), I always walk away amazed by the folks that participate in this (sort of scary) sport. I realized this time that the things that amaze me are so broadly applicable that Meaghan has actually written about all of them on The Mentor Blog. Here are a few that come to mind:
– Long-Term Thinking. My husband’s team added a massive wing on the back of the car for this race. Apparently, it had its intended effect of making the car feel actually responsive and less “squirrelly,” so they felt more comfortable driving the car harder. But this is an endurance race with unreliable cars. They tried to resist the temptation to up their lap speed. The upside of a few more laps in an hour was not worth the risk of a time-consuming repair that keeps them off the track (and not doing any laps) for many hours (that said, see below).
Meaghan concluded a Mentor Blog called “What I Wish Someone Told Me” with the reminder that billing an obscene amount of hours to the detriment of all else in life can be a recipe for burnout. Sometimes you may need to remind yourself that this is your career — not just your job today — and that the deal of the day can’t keep taking precedence over your health and relationships.
– A Growth Mindset. Of the six members of my husband’s team, not one of them has a degree or professional background in automotive engineering. They have learned hundreds of new skills they didn’t have before and they did it in front of people! In some cases, track side with other teams watching. (Ahh!) They might have been afraid of failure and embarrassment, but they didn’t show it and it didn’t stop them.
My inclination to learn and perfect something privately seemed like a strength to me when I was younger. Now I try to see when it is holding me back (it’s even the reason I didn’t like going bowling until my 20s) and recognize when I’ve developed skills that can translate to other roles and contexts. I was inspired my Meaghan’s “why not try it?” approach, and I’ve been trying to channel that energy myself!
– Optimism & Resourcefulness. This was the second race where his team won the award for “Heroic Fix.” It goes to the team that successfully tackles a repair (or, in their case, three repairs) and gets back on the track after everyone thought it wasn’t possible. Some teams with devastating damage “throw in the towel.” In fact, when we leave, we spectators often see a few broken lemons on trailers in town leaving the race early. But optimistic racers (like my husband!) set aside their disappointment about being towed off the track and realizing they didn’t pack the particular part they need. They walk the paddock looking for teams that have spare parts, tools or even skills that the team with the broken car doesn’t have . . . yet! (This is a collaborative more than competitive league — and most teams are willing to share!)
I was reminded of Meaghan’s blog about setting aside the things we can’t control and focusing on what we can change — sometimes we need to give ourselves the pep talk we need and get to it!
If you don’t already, go sign up to receive The Mentor Blog in your inbox to benefit from Meaghan’s valuable and entertaining career wisdom — without all these unnecessary automotive analogies. The blog is available to members of TheCorporateCounsel.net. If you’re not already a member, sign up to take advantage of the no-risk “100-Day Promise” — during the first 100 days as an activated member, you may cancel for any reason and receive a full refund.
Finally, unrelated to the law at all, but for your viewing pleasure, here is the aforementioned “lemon.” I hope you have a great weekend and make some lemonade!
Liz shared in January (pre-Inauguration Day) what we think was the first “AI washing” case against a public company. While “AI washing” securities suits continued, it wasn’t clear whether and how this enforcement priority would shift — or continue — under the new administration. This Weil alert highlights two more recent SEC and DOJ enforcement actions that it says underscore the continued federal enforcement focus in this area.
On April 9, 2025, the U.S. Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office for the Southern District of New York commenced parallel actions against Albert Saniger, the former CEO of Nate, Inc. (Nate), a privately-held technology startup, alleging that he made materially false and misleading statements to investors regarding the company’s artificial intelligence (AI) capabilities.
Then on April 22, 2025, the SEC and the U.S. Attorney’s Office for the Eastern District of Virginia announced parallel charges against Ramil Palafox, the founder of PGI Global, alleging, among other claims, that he made false statements to investors regarding the development of an AI-powered crypto auto-trading platform and other topics.
We know that enhancing “America’s global AI dominance” is a priority for this administration, and the alert says that the “accompanying statements by DOJ and SEC officials signal that the current administration may view AI washing as a threat to achieving its broader policy initiative and accordingly, intends to pursue civil and criminal charges based on alleged false and misleading statements regarding AI capabilities, which may include fundraising by public companies, private companies, and investment advisers.” It suggests that companies (and investment advisors):
– Conduct a thorough review of their disclosures and public-facing statements regarding AI capabilities (with particular attention to statements used in fundraising activities, whether in the public or private markets);
– Ensure that such disclosures and statements are accurate and consistent; and
– Ensure they can be substantiated with supporting documentation.
We’ve posted this and other related memos in our (very robust) “Artificial Intelligence” Practice Area. For more on risk management and compliance issues associated with AI and other emerging technologies, be sure to check out and subscribe to our free AI Counsel Blog.
As Liz shared last month, “Nasdaq has begun engaging with regulators, market participants and other key stakeholders, with a view of enabling 24-hour trading five days a week on the Nasdaq Stock Market” by the second half of 2026. Personally — like Liz — my main reaction was trepidation. But, if you hadn’t read through the LinkedIn newsletter she linked to, it’s worth a closer look — I’m not sure why, but I found it somewhat reassuring to consider in more detail how IR monitoring tools, processes and responsibilities will evolve.
Here are a few of the open questions and tips shared in the newsletter:
– Extended “active” hours: IR teams may need to decide how to offer consistent coverage beyond the typical workday. Even if there is no expectation of “live” spokesperson availability at 3 am, you might need a system in place to post (and monitor) updates on your IR website and social media channels when market-moving news surfaces at unconventional times.
– Communication handoffs: For companies with truly global footprints, rotating IR responsibilities across regional offices could be a solution, ensuring an IRO is always ready to clarify or contextualize price changes for global stakeholders.
– Earnings release timing: Should a company still release earnings after the “official” close if there is no final close in a seamless, extended session? Companies might look at scheduling announcements to align with windows of higher liquidity (even if it’s in the middle of the night in the US).
– Rapid-response mechanisms: IR professionals need to map out escalation protocols if unexpected global events (such as geopolitical announcements or macro shocks) trigger premarket or overnight volatility. Preparing rapid-turnaround Q&As, bullet-point summaries, or video statements could help settle investor nerves in real time.
1. Expert Speakers. We’re bringing together an impressive and dynamic group of speakers. Their varied experience — including as SEC Staff, in-house counsel and in private practice — is invaluable. (Truly! Think of the total hourly rates!)
2. Practical Content. Big changes are afoot! With a new presidential administration doing an about-face on the regulatory agenda, you need to hear all the practical action items these leading experts will be sharing. Let them help you navigate change and issue spot — ultimately saving you time and money.
They’ll cover topics like “E&S: Balancing Risk & Reward in Today’s Environment,” “Delaware Hot Topics: Navigating Case Law & Statutory Developments,” “The Proxy Process: Shareholder Proposals & Director Nominations” and “The Year of the Clawback” — and whatever regulatory (and deregulatory) developments happen between now and October that you’ll inevitably need to understand and be called to advise on!
3. Timed to Help You. The Conferences are timed and organized to give you the very latest action items that you’ll need to prepare for the flurry of year-end and proxy season activity. Why spend time & money tracking down piecemeal updates to share with your higher-ups and board – all while you’re under a deadline and have other pressing obligations, increasing the risk of mistakes – when you can get all of the key pointers at once.
4. Networking. Network face-to-face and foster meaningful connections with industry leaders, potential clients, collaborators and mentors. This year’s Conferences have even more opportunities to do so — including a special welcome event to celebrate our 50th Anniversary!
5. CLE Credit. We will apply for CLE credit for the Conferences. Most states allow credit for lawyers who attend in-person or via live video webcasts as they are airing. As we get closer, we will post a list of states for which the conferences are accredited.
6. On-demand Archives. Unlike some conferences, the on-demand archives (and transcripts!) will be available at no additional charge to attendees after the event, and you can continue to access them for 12 months. That means you can continue to refer back to the sessions as issues arise. Again, saving time and money.
7. Valuable Course Materials. In addition to live and on-demand access to these fast-paced sessions, Conference attendees get exclusive access to our Course Materials – which include unique and practical bullet points and examples from our experienced speakers on each topic we’ll be covering. Our speakers go the extra mile to provide usable takeaways. The Course Materials are an invaluable resource to refer back to as proxy season approaches.
8. Exhibitors. Interact with our sponsors and exhibitors and learn how these partners can help you. Our Conferences are also held in conjunction with the annual conference of the National Association of Stock Plan Professionals (NASPP) with “equity’s largest expo hall.”
9. Early Bird Rate. Register now to lock in our “early bird” deal for in-person registration!
10. Vegas, Baby, Vegas. Love it or hate it, you have to admit that Las Vegas (and the surrounding area) has more to offer than neon lights and gambling. In fact, there seems to be something for everyone — including foodies and outdoor enthusiasts!
The Conferences are happening October 21st & 22nd at the Virgin Hotels Las Vegas and virtually! (NOTE that the Conferences are Tuesday & Wednesday this year, not Monday & Tuesday!) Register online by credit card or by emailing info@ccrcorp.com or calling 1.800.737.1271.
