The SEC’s New Rules on Executive Compensation
Illuminating the Disclosure Requirements

By Kathryn Yeaton

JULY 2007 - Executive compensation has come under intense scrutiny in recent years, with numerous controversies over compensation, retirement, and severance packages. In response to investors’ criticisms of inadequate and confusing executive compensation information, the SEC has been pushing toward increased transparency and disclosure of crucial elements of executive compensation packages. On July 26, 2006, the SEC adopted new rules addressing “Executive Compensation and Related Person Disclosure.” As of the date of the SEC vote, the SEC had received in excess of 20,000 comments on the proposed changes. According to SEC Press Release 2006-123, this is the greatest interest shown in any SEC revision in the commission’s 72-year history.

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Essentials
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Displaying the Funding Status of Postretirement Plans

FASB issued Statement of Financial Accounting Standards (SFAS) 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, in September 2006. SFAS 158 represents the initial phase of a comprehensive project on employers’ accounting for postretirement plans. FASB began the project in November 2005 in response to requests by users of financial statements, the SEC staff, members of FASB’s Financial Accounting Standards Advisory Council and User Advisory Council, and representatives of the Pension Benefit Guaranty Corporation. Full Story

The Alternative Minimum Tax

The AICPA recently held its biennial lobbying day in Washington, D.C., and—as a participant—I’m pleased to report that the AICPA Council members from New York saw 12 members of the New York Congressional delegation. That’s good news for New Yorkers and New York State CPAs. It means that issues that are important to you are being communicated to members of Congress, and that New York interests are being well represented. It may come as no surprise that the alternative minimum tax (AMT) was one of the most talked-about issues at this event. Full Story

Auditors’ Reactions to Sarbanes-Oxley

The Sarbanes-Oxley Act of 2002 (SOX), as implemented by the SEC and the Public Company Accounting Oversight Board (PCAOB), remains controversial. Indeed, some continue to argue that the law needs to be reworked, as stated in The Wall Street Journal (November 10, 2006), to avoid “needlessly conservative and costly” audits that put U.S. firms at a “competitive disadvantage.” One particular concern is that SOX applies to all U.S-registered companies regardless of size, so many have called for an exemption for relatively small registered firms. Full Story



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