SEC sees concerns on comp disclosure.

• Author: Marshall, Jeffrey
• Position: COMPLIANCE - Brief article

Compliance related to the U.S. Securities and Exchange Commission's (SEC) 2006 rules on executive compensation disclosure remains something of a work in progress, at least according to the SEC, which reviewed the proxy filings of 350 companies last year.

John White, director of the SEC's Division of Corporate Finance, reported on the analysis at FEI's Current Financial Reporting Issues conference in New York in November. He said the agency was "generally pleased" by the review, which focused mainly on large companies. But he identified two areas of concern:

* Manner of Presentation. The SEC has an expectation of clear, understandable disclosure, but found a number of companies' disclosures wanting. "It takes care and time" to distill the necessary information and make it succinct, White said--companies can't just dump data into the proxy on the theory that providing more information is better.

* Compensation Discussion & Analysis (CD & A). This was written as a principles-based requirement, White said, and it needs to detail objectives and policies, as well as provide analysis...