Last month, Congress passed the “Fair Access to Investment Research Act” – signed by the President into law a few weeks later – which requires the SEC to ease restrictions on broker-dealer research reports on ETFs and other investment company securities. The FAIR Act requires the SEC to expand an existing safe harbor for research reports that prevents them from being considered an “offer” under the Securities Act, and to limit SEC & FINRA filing requirements for those reports.
I know, I know – “yada, yada, yada” – but here’s the thing, the legislation has a unique provision designed to prod the SEC to act on the rulemaking required by the statute. This Davis Polk blog explains:
The bill includes a provision that one sponsor of the bill described as an effort to “hold[] the SEC accountable to follow Congress’ direction.” The bill directs the SEC to amend its rules, within 270 days of enactment, to implement the safe harbor in a manner consistent with specific parameters set forth in the bill. If the SEC fails to do so by the 270-day deadline, however, the bill provides for an “interim effectiveness” during which the expansions to the safe harbor would automatically be deemed to be in effect, “as if revised and implemented” in accordance with Congress’ directions.
Some members of Congress have not been happy about the SEC’s inability to adopt the roughly 12 trillion regs required under Dodd-Frank & the JOBS Act on a timely basis – and this is intended to prod the agency to act more quickly:
The interim effectiveness provision may spur the SEC to act more quickly to implement the FAIR Act in order to address the inevitable ambiguities contained in legislation—facilitating its implementation through their expertise in administering the securities laws. If this device is successful in forcing the SEC to accelerate its rulemaking efforts, look for Congress to employ it in future legislation.
Of course, while Congress is telling the SEC to speed up, the agency’s been getting a different message from the courts – the blog points out that the DC Circuit has invalidated recent SEC rulemaking “for failure to conduct sufficient analysis, including in terms of the cost-benefit analysis of new rules.”
SCOTUS: MD&A “Known Trends” Case Goes Away. . .
As Broc previously blogged, last March, the Supreme Court granted cert to a 2nd Circuit case involving whether MD&A’s “known trends” line-item disclosure requirements can give rise to 10b-5 liability. Now, it looks like resolution of that issue will have to wait for another day – this Hunton & Williams memo says that the parties to Leidos v. Indiana Public Retirement System have reached a settlement.
ICOs: Nasdaq-Listed Company to Take the Plunge
Steve Quinlivan recently blogged about a Nasdaq-listed issuer that’s considering an initial coin offering. Steve does his best to describe what the company’s proposing in plain English. See if you can figure it out – I’m admittedly not the sharpest knife in the drawer, but I have absolutely no idea.
Naturally, the company’s stock shot up 70% on the news. Resistance is futile.
Yesterday, bumping up against a deadline to act, the SEC unanimously approved the PCAOB’s new audit reporting standard, AS #3101 – the first major overhaul of the audit report in more than 50 years. Here’s the SEC’s order. We’ll be posting memos in our “Audit Reports” Practice Area.
As Liz blogged at the time of the PCAOB’s adoption of the standard, audit reports will look fundamentally different under the new regime. Among other items, they will need to describe the auditor’s take on “CAMs”(“critical audit matters”) – matters communicated to the audit committee that relate to material accounts or disclosures and involve complex auditor judgment. These changes become effective for annual periods ending on or after June 30, 2019 for large accelerated filers & on or after December 15, 2020 for all other filers.
The new standard also requires audit reports to include information about auditor tenure, and to clarify the language addressing the auditor’s responsibilities. It also completely revamps the report’s organization and formatting. These changes will become effective for audits of annual periods ending on – or after – December 15, 2017.
Critics of the proposal contend that the additional disclosures – and particularly the requirement to address CAMs – will lead to more litigation targeting auditors. Those concerns were addressed by SEC Chair Jay Clayton in his statement on the SEC’s approval of the proposed change:
I would be disappointed if the new audit reporting standard, which has the potential to provide investors with meaningful incremental information, instead resulted in frivolous litigation costs, defensive, lawyer-driven auditor communications, or antagonistic auditor-audit committee relationships — with Main Street investors ending up in a worse position than they were before.
I therefore urge all involved in the implementation of the revised auditing standards, including the Commission and the PCAOB, to pay close attention to these issues going forward, including carefully reading the guidance provided in the approval order and the PCAOB’s adopting release
The statement went on to note that the PCAOB will monitor the results of the new standard’s implementation – “including consideration of any unintended consequences.”
I’m old enough to remember the days of counting paragraphs in an auditor’s opinion – if there were more than 3, that meant the opinion was qualified. But counting paragraphs was all anybody did – the rest was useless boilerplate. That boilerplate was nibbled at around the edges over the years, but the report still didn’t convey much useful information.
Yesterday, the SEC didn’t just pare back the boilerplate – it blew up the boiler. Time will tell if anybody gets scalded. But CAMs have been disclosed in the UK for several years without much consequence…
Multi-Class Stock: Reports of Its Death Greatly Exaggerated?
To the extent institutional investors expected that promising companies, especially technology companies, would choose being listed in one of the indexes rather than implementing governance structures that these companies (and their boards and earliest investors) believed better suited their businesses in the long-term, the institutions have clearly been disappointed.
Indeed, in just the few weeks since the indexes announced their decision, there have been several prominent—and very successful—IPOs by tech companies with dual-class stock. Examples of such recent offerings include Roku and CarGurus, which have both benefited from substantial stock increases since the first day of trading; and data center operator Switch, which also continues to trade nicely above its IPO price.
The memo notes that several other companies with multi-class structures are planning to launch IPOs during the 4th quarter.
Multi-Class Stock: BlackRock Opposes Exclusion from Indexes
Here’s another sign that multi-class structures are … uh… “undead.” (Sorry, Halloween’s coming & I couldn’t resist.) BlackRock recently issued this statement saying that it opposes the exclusion of companies with multi-class stock from major indexes. This blog from Davis Polk’s Ning Chiu discusses BlackRock’s position. Here’s an excerpt:
BlackRock believes that these actions limit access to the universe of public companies for their index-based clients, depriving them of opportunities for returns. Policymakers should set corporate governance standards through regulation. Index providers should reflect the “investable marketplace” in diverse and expansive benchmark indices, in order to facilitate investors’ use of those indicies and align them with the objectives of public equity investors.
BlackRock’s statement goes on to say that it is a strong advocate of equal voting rights – and, among other things, wants companies with dual or multi-class structures to periodically submit those structures to shareholders for approval.
Here’s something that John blogged recently on the “DealLawyers.com Blog”: We recently blogged about the uncertainty surrounding the scope of Reg G’s exemption for disclosure of non-GAAP information contained in projections provided to financial advisors. A few days ago, Corp Fin issued a new CDI that helps address some of that uncertainty.
New Non-GAAP CDI 101.01 provides that financial measures included in forecasts provided to a financial advisor and used in connection with a business combination transaction won’t be regarded as non-GAAP financial measures if & to the extent that:
– The financial measures are included in forecasts provided to the financial advisor for the purpose of rendering an opinion that is materially related to the business combination transaction; and
– The forecasts are being disclosed in order to comply with Item 1015 of Regulation M-A or requirements under state or foreign law, including case law, regarding disclosure of the financial advisor’s analyses or substantive work.
Because the tender offer rules don’t specifically reference the relevant provisions of Item 1015 of Reg M-A, some have contended that the exemption from Reg G’s requirements shouldn’t extend to disclosures contained in tender offer materials. By referring to both the requirements of Item 1015 of Reg M-A and state law, the new CDI clarifies that the availability of the exemption does not depend on whether the disclosure appears in a tender offer document, a proxy statement or a registration statement.
Forecasts may be included in disclosure documents for a variety of reasons, and since the new CDI clarifies that the exemption only applies “if and to the extent” forecasts were provided for the purposes of rendering an opinion, it doesn’t necessarily cover the waterfront.
In connection with the adoption of the new CDI, the Staff renumbered the existing CDIs and deleted references to Item 1015 that previously appeared in what is now Non-GAAP CDI 101.02.
Transcript: “E&S Disclosures – The In-House Perspective”
We have posted the transcript for the webcast: “E&S Disclosures: The In-House Perspective.”
“Pay Ratio & Proxy Disclosure Conference”: Sights & Sounds
Here’s some pics from last week’s “Pay Ratio & Proxy Disclosure Conference”:
Me & Nell Minow
Corp Fin All-Stars: Dave, Meredith, Keith, Brian, Keir & Marty
Virtual reality offered @ BDO’s booth
My dad showing off @ Schwab’s fitness-oriented booth
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.
Recently, the PCAOB issued this Staff audit alert to assist independent auditors in applying PCAOB standards when they audit their client’s implementation of FASB’s new revenue recognition standard. Topics covered include:
– Transition disclosures & adjustments
– Internal control over financial reporting
– Fraud risks
– Revenue recognition
– Disclosures
Here’s an excerpt from the alert’s discussion of key factors for auditors to consider when assessing the internal control implications of the new standard:
PCAOB standards require the auditor to obtain a sufficient understanding of each component of internal control over financial reporting to (a) identify the types of potential misstatements, (b) assess the factors that affect the risks of material misstatement, and (c) design further audit procedures.
Changes to company processes for the implementation of the new revenue standard can affect one or more components of internal control. For example, the auditor is required to obtain an understanding of the company’s control environment, including the policies and actions of management, the board of directors, and the audit committee concerning the company’s control environment.
Check out this recent blog from Steve Quinlivan for more on the PCAOB’s alert. And we’re posting numerous memos on transition issue – and the new revenue recognition standard more specifically – in our “Revenue Recognition” Practice Area.
Revenue Recognition: SEC Comments for Early Adopters
This “SEC Institute” blog reviews Corp Fin’s comments on filings by two early adopters of FASB’s new revenue recognition standard. The Staff’s comments – which are set forth in full in the blog – focus on MD&A and financial statements. And their emphasis is on the adequacy of disclosure and seeking to understand how the company made judgments in applying the new principles-based standard.
While the two companies that received comments were able to resolve them quickly, the blog also includes a reminder that not all comments on new accounting standards have happy endings:
New accounting standards always draw attention from the SEC. Way back in the 1990s, SFAS 133 (now of course ASC 815) was issued to create dramatically different new guidance for derivative and hedge accounting. Louis Dreyfus Natural Gas early adopted the new standard. After certain issues were raised in an SEC review, Louis Dreyfus Natural Gas was forced to restate its initial application of the new derivative accounting model.
“Black Monday”: 30 Years Ago Today!
It’s hard to believe, but “Black Monday” – the great stock market crash of 1987 – happened 30 years ago today, October 19, 1987. This Bloomberg article recounts memories of that day from a cross-section of Wall Street players. So much that was once unthinkable has happened to the markets & the world since that day that I’m sure some of our younger readers are asking themselves, “what’s the big deal?”
Well, the greatest single one day drop in Wall Street’s history didn’t occur in 1929 or 2008 – it happened on Black Monday in 1987. The market lost nearly 23% of its value in a single day. This quote from a trader will give you some sense of how many people felt that day:
I was so scared that I got $10,000 out of the bank, took it home, and stored it in the rafters.
Personally, I remember that day vividly. I was in a drafting session for a public offering, and the bankers kept nervously calling their office to find out how the market was doing. By the time the market closed, it was very apparent to everyone that our deal was stone dead.
– How to Attend by Video Webcast: If you are registered to attend online, just go to the home page of TheCorporateCounsel.net or CompensationStandards.com to watch it live or by archive (note that it will take about a day to post the video archives after it’s shown live). A prominent link called “Enter Wednesday’s Pay Ratio Conference Here” – on the home pages of those sites – will take you directly to today’s Conference (and on the top of that Conference page, you will select a link matching the video player on your computer: HTML5, Windows Media or Flash Player). Here are the “Course Materials,” filled with 182 pages of annotated model pay ratio disclosures, 156 pay ratio nuggets, talking points, etc.
Remember to use the ID and password that you received for the Conferences (which may not be your normal ID/password for TheCorporateCounsel.net or CompensationStandards.com). If you are experiencing technical problems, follow these webcast troubleshooting tips. Here is today’s conference agenda; times are Eastern.
– How to Earn CLE Online: Please read these “FAQs about Earning CLE” carefully to see if that is possible for you to earn CLE for watching online – and if so, how to accomplish that. Remember you will first need to input your bar number(s) and that you will need to click on the periodic “prompts” all throughout each Conference to earn credit. Both Conferences will be available for CLE credit in all states except for a few – but hours for each state vary; see this “List: CLE Credit By State.”
Say-on-Pay: Despite Few “Failures,” 12-14% Run Into Problems
Here’s the intro from this interesting blog by Davis Polk’s Ning Chiu:
Although the failure rate for 2017 say-on pay results achieved an all-time low of just 1.3%, the number belies the fact that more than 2,000 say-on pay proposals have either received negative recommendations from ISS or less than 70% support, or both, since say-on-pay resolutions started in 2011.
Approximately 12% to 14% of companies run into problems every year. As companies have become more proactive with shareholder engagement, the number of companies that received “against” recommendations from ISS and still achieved more than 70% support has increased in the last three years, while the number of companies with those negative recommendations that received less than 70% favorable votes have fallen.
What may be most surprising to companies, however, is that about 10 to 15 companies each year received positive endorsement from ISS and still obtained less than 70% support.
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here’s a sampling of entries:
– 87% of S&P 500 Disclose Political Spending Policy
– Few Can Fill the CEO’s Job, Directors Say
– Conflict Minerals: What to Consider for Next Year
– What is the “Long-Term Stock Exchange”?
– UK: Guidance in Response to “Green Paper”
– SCOTUS: Big Term for Securities Law Cases
Today is the “Pay Ratio & Proxy Disclosure Conference”; tomorrow is the “Say-on-Pay Workshop: 14th Annual Executive Compensation Conference.” Note you can still register to watch online by using your credit card and getting an ID/pw kicked out automatically to you without having to interface with our staff. Both Conferences are paired together; two Conferences for the price of one.
– How to Attend by Video Webcast: If you are registered to attend online, just go to the home page of TheCorporateCounsel.net or CompensationStandards.com to watch it live or by archive (note that it will take about a day to post the video archives after it’s shown live). A prominent link called “Enter Pay Ratio Conference Here” – on the home pages of those sites – will take you directly to today’s Conference (and on the top of that Conference page, you will select a link matching the video player on your computer: HTML5, Windows Media or Flash Player). Here are the “Course Materials,” filled with 182 pages of annotated model pay ratio disclosures, 156 pay ratio nuggets, talking points, etc.
Remember to use the ID and password that you received for the Conferences (which may not be your normal ID/password for TheCorporateCounsel.net or CompensationStandards.com). If you are experiencing technical problems, follow these webcast troubleshooting tips. Here is today’s conference agenda; times are Eastern.
– How to Earn CLE Online: Please read these “FAQs about Earning CLE” carefully to see if that is possible for you to earn CLE for watching online – and if so, how to accomplish that. Remember you will first need to input your bar number(s) and that you will need to click on the periodic “prompts” all throughout each Conference to earn credit. Both Conferences will be available for CLE credit in all states except for a few – but hours for each state vary; see this “List: CLE Credit By State.”
SEC Comments: What’s the New “SWAT” Process?
Recently, a member posted this question in our “Q&A Forum” (#9233): “Back on September 18th, Broc blogged about Corp Fin having a new SEC comment letter process. Is the whole “Swat” thing something that is a big difference in how Corp Fin is processing comment letters?” This was my answer:
SWAT is a workflow system that will better document the Staff’s comment letter process, make everything available to everyone on the Staff more easily, provide reports and reminders, etc. It’s all internal and won’t have any impact on what companies see. So it’s just a workflow system. No real impact on what is commented upon…
Corp Fin’s “Climate Change” Comments: The Coming GAO Report
By the way, the announcement about SWAT was buried in the SEC’s Inspector General report about Corp Fin’s comment letter process. That report was pretty innocuous and not of any great moment.
I forgot to note why the IG prepared that report. In July of last year, some members of Congress sent a letter to the IG (and to GAO) asking that they review the SEC’s efforts to implement the climate change guidance of 2010 and assess Corp Fin’s comment letter process. These members of Congress were of the view that Corp Fin should be issuing more comments and they wanted to understand why that was not the case.
This IG report says that the GAO will report separately on its observations related to the SEC’s climate change-related policies & procedures. Now that should be interesting…
One of the things that I’ve blogged about more than I would like is how the Reg Flex Agenda is merely aspirational – and people should pay little mind to it (here’s one of my more recent entries). History certainly has borne out the truth – I imagine the SEC has missed it’s predicted timetables for rulemakings listed in the Reg Flex Agenda many more times than not. And not that there’s anything wrong with that, it’s always been viewed as a meaningless regulatory exercise for those “in the know.”
But now – probably due to all the Congressional & media attention being paid to it – SEC Chair Clayton recently told the Senate Banking Committee that he intends to make the Reg Flex Agenda more realistic, including streamlining it (see this Cooley blog).
Kudos if the SEC can pull it off. But I worry that by promising to make deadlines, the SEC is placing a bullseye upon itself. In recent years, the Staff has smartly avoided mentioning any “hard” time frames for conducting rulemaking. That’s because it’s nearly impossible to predict when a rulemaking will come out, even when you’re the one actually writing the rules! It’s difficult to even predict which season of the year it will happen.
There’s a myriad of review layers within the SEC, including:
1. Your superiors within your Division (and there might be quite a few of those)
2. The folks within the SEC’s Office of General Counsel
3. That ever-growing newish Division of Economic & Risk Analysis (DERA)
4. Each Commissioner (and their counsels)
5. Possibly other Divisions or Offices within the SEC, depending on the nature of the rulemaking
6. Possibly members of Congress (or their staff) if it’s a politically-sensitive topic
You think its tough getting your proxy through an internal review? That’s nothing. A proposing/adopting release can easily go through 20 drafts. Anyway, I draw your attention to the transcript of one of my favorite webcasts if you want to learn more: “How the SEC Really Works“…
Recently, I blogged how the SEC’s Edgar is critical to a transparent financial market – and how the recent hack of Edgar is serious business. This Reuters article notes that Edgar could be at risk from “denial of service” attacks. Even worse news comes from this excerpt:
The memo shows that even an unintentional error by a company, and not just hackers with malicious intentions, could bring the system down. Even the submission of a large “invalid” form could overwhelm the system’s memory.
Hopefully, Congress will do the reasonable thing and give the SEC more resources (they need it in all sorts of areas – including to investigate when it is hacked, as noted in this article). Edgar arguably is held together with duct tape and no one should act surprised that it was hacked. The NSA can’t even avoid getting hacked.
By the way, this new bill that would subject credit bureaus – like Equifax – to federal cybersecurity reviews cracks me up. As if the federal government will be using its best cyber resources to review the security of outside entities – it can’t even protect its own systems…
Your Sensitive Information Was Accessed in a Government Hack? No Remedy?
This Davis Polk blog notes that those who have their personal information stolen during a hack of a government database are unlikely to have a remedy. And this Davis Polk blog wonders whether the hack of Edgar will result in a delay of the Consolidated Audit Trail (which will consist of a central repository for SROs and broker-dealers to submit extensive information in standardized formats regarding securities trading activity)…
The SEC’s New “Cyber” Unit: Getting the Band Back Together!
Last week, I blogged about the challenges that the SEC will face hiring cybersecurity experts given the extreme shortage of that resource. On a lighter note, it is interesting that the SEC’s Division of Enforcement disbanded its “Office of Internet Enforcement” in 2009, recognizing that the entire Division really should have expertise in that area. Now with the SEC creating a similar “Cyber” unit, John Reed Stark shared this great pic of his former office on LinkedIn:
Perhaps you thought the FAST Act was way behind us – but remember the SEC still hasn’t adopted some rules required by Dodd-Frank. Yesterday, the SEC proposed a variety of rules and form changes as required by the FAST Act. Here’s the 253-page proposing release; we’ll be posting memos in our “Disclosure Effectiveness” Practice Area. In this blog, Cydney Posner highlights some of the proposals, including:
1. Limit the period-to-period comparison required in MD&A to only the two most recent fiscal years presented in the financials, so long as the earlier period discussion is no longer material to understanding the financials and it has been included in the previous 10-K.
2. Allow companies to omit or redact confidential information from material contract exhibits that is not material and would cause competitive harm if publicly disclosed, without having to submit an unredacted copy and prior formal request to the Corp Fin Staff, as is currently required. This is intended to change process only & will not be intended to change the substantive requirements.
3. Limit the two-year “look back” requirement for exhibits to apply only to newly reporting companies.
4. Clarify that disclosure regarding properties is required only to the extent that the property is material.
5. Require inline XBRL tagging for all cover page information – and require the cover page to include the (tagged) ticker symbol for each class of securities registered under the Exchange Act.
6. Require disclosure of legal entity identifiers (“LEIs”) for the company & any significant subsidiaries identified on Exhibit 21.
7. Require links to information incorporated by reference from previously filed documents.
In this blog, Ning Chiu does a great job of listing the seven ways that periodic reporting could change…
Pay Ratio: How to Handle PR & Employee Fallout
For those coming to next week’s “Pay Ratio & Proxy Disclosure Conference,” you’ll hear tidbits about the hot “employee reaction” topic all day long – but particularly during the panel entitled “Pay Ratio: How to Handle PR & Employee Fallout.” Recently, as noted in this press release, Willis Towers Watson found that this was the topic of largest concern when it surveyed companies. Here’s an excerpt:
Indeed, roughly half of the respondents polled (49%) cited forecasting how their employees will react to the ratio disclosure as their number one challenge, but that other challenges still loom. About four in 10 (39%) said determining the consistently applied compensation measure (CACM) is their great challenge followed by getting accurate pay data (38%), deciding how to craft their required disclosure (37%) and determining where their pay ratio stands compared with that of their peers, their industry and the market (35%).
We continue to post new items regularly on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– More on “Showing Off Your Directors Via Video”
– Shareholder Proposal Reform: Keith Higgins Wades In…
– Showing Off Your Directors Via Video
– Proxy Season: Steps to Take Now to Prepare
– Online Disclosure & Mobile IR Websites: S&P 500 Study
