May 4, 2010
Corp Fin Comments on Silence Over Compensation Policies Creating Material Risk
– Broc Romanek, CompensationStandards.com
In recent weeks, Corp Fin has begun to comment on the absence of disclosure regarding a company’s compensation policies and practices that create risks that are reasonably likely to have a material adverse effect on the company. Corp Fin Director Meredith Cross has noted during speaking engagements that the comments were designed to ensure that the company’s risk evaluation process was “robust.”
Based on feedback from members on the SEC comments they have received, there appears to be a standard comment – but sometimes there are variations. It’s also believed that the Staff is just looking for a supplemental response and not necessarily “negative” disclosure (ie. disclosure that there are no material risks, etc.).
I’m sure there is more to come in understanding what the Staff wants in this area.Tune into our upcoming webcast – “The Latest Compensation Disclosures: A Proxy Season Post-Mortem” – with Mark Borges, Dave Lynn and Ron Mueller to learn more…