Talking Points: Some Observations from the Playing Field …

By Brian Foley, Managing Director, Brian Foley & Company, Inc. (10/11/07)

As we head into the tail-end of the 2007 proxy season …

12 ongoing problems with the “new” proxy rules

  1. Failure to require 3-year look in SCT
     
  2. Reporting of annual bonuses in SCT
     
  3. Switch to FAS 123R ## in SCT reporting
     
  4. Elimination of required year-end spread ## on options
     
  5. Absence of stock retention data on options and SARs exercised during year, and full-value awards vesting during year
     
  6. Failure to require current proxy disclosure of material Q1 developments occurring before proxy mailing date
     
  7. Failure to require footnote quantification of cash dividends on restricted stock
     
  8. Failure to require disclosure of cash-based LTIPs in progress for cycles starting prior to last full year
     
  9. Failure to require disclosure of employer-funded tax-qualified DC account balances
     
  10. Failure to require proxy disclosure of the impacts of recent earnings restatements on prior NEO compensation for years in question – if so, how so; if not, why not
     
  11. Decision not to require better disclosure of “other work” performed for Management by Compensation Committee’s consultant (existence, nature, extent and value)
     
  12. Failure to require inclusion of, or clear cross-references to, already-vested items (e.g., vested options, SARs, RSUs, SERP benefits/balances) in “termination scenario” disclosures – what’s the full “all-in” walk-away?

SELECTED CURRENT PRACTICE ISSUES