Survey Results: Compensation Consultant Conflicts Disclosure

A new SEC rule (Item 407(e)(3)(iv) of Regulation S-K) requires disclosure if a conflict of interest has arisen in connection with the work of a compensation consultant (whether selected by management or the compensation committee). To satisfy this disclosure requirement, companies will need to conduct a conflicts of interest assessment. This raises the question of whether companies will include voluntary disclosure (so-called "negative disclosure") in their proxy statement when a determination of "no conflict" has been made. Please participate in this anonymous survey:

1. For our next proxy statement, when it comes to the newly required conflicts of interest disclosure about compensation consultants (ie., Item 407(e)(3)(iv) of Regulation S-K), assuming that no conflict of interest is identified, our company: (Total responses: n=74)
(select only one)
n=46 (62.16%) Has made a decision, at least at the staff level, whether to make voluntary negative disclosure (eg., as an anticipatory "best practice" or simply to signal to the SEC Staff and our shareholders that we were aware of the new disclosure requirement)
n=26 (35.14%) Hasn't yet figured out whether it will make any voluntary negative disclosure
n=2 (2.70%) I hadn't realized that there is a new conflicts of interest disclosure (and assessment) requirement!

2. For those of you who know which approach your company will take, our company intends to: (Total responses: n=52)
(select only one)
n=13 (25.00%) Only provide disclosure if a conflict of interest is identified - and not provide any voluntary negative disclosure
n=35 (67.31%) Provide voluntary disclosure that a conflicts of interest assessment was conducted and that no conflict of interest was identified.
n=4 (7.69%) Provide voluntary negative disclosure that works through one or more of the six non-exclusive factors supporting a "no conflict of interest" conclusion