SEC Seeking More Exec Pay Info from Companies

WASHINGTON -- The Securities and Exchange Commission started sending letters this week to a cross-section of public companies, requesting further details about how they pay their executives, an agency spokesman said on Wednesday, according to Reuters.

The letters are part of an SEC project to determine if companies are adequately following new rules that took effect during the 2007 proxy statement season. The rules require companies to reveal more data and explanation about their executives' compensation, Reuters reported.

SEC spokesman John Nester said the review project was initiated over the summer but declined to say how many letters were being sent or to identify the companies, Reuters reported.

"The commission's new rules produce the clearest-ever disclosure of what companies are paying their executives," he said, according to Reuters. "Comment letters will help companies better explain why."

The SEC rules require companies to give a single number for an executive's pay, instead of the jumble of figures previously scattered across proxy statements. The old system often allowed companies to obfuscate about payment and compensation packages, frequently including footnotes that referenced complicated bonus and options plans. The new rules also require companies to explain why they chose to compensate their executives as they did, Reuters reported.

-- NYSSCPA.org News Staff

Posted on 8/23/07