March 7, 2011
Corp Fin Issues CD&A CDI Regarding Performance Targets
– Broc Romanek, CompensationStandards.com
As I blogged on TheCorporateCounsel.net today, on Friday, Corp Fin issued nine new Compliance and Disclosure Interpretations on a variety of topics – including this one repeated below regarding the CD&A and performance targets:
Section 118. Item 402(b) – CD&A – Question 118.07
Question: In Compensation Discussion and Analysis (CD&A), is a company required to discuss executive compensation, including performance target levels, to be paid in the current year or in future years?
Answer: No. The CD&A covers only compensation “awarded to, earned by, or paid to the named executive officers.” Although Instruction 2 to Item 402(b) provides that the CD&A should also cover actions regarding executive compensation that were taken after the registrant’s last fiscal year’s end, such disclosure requirement is limited to those actions or steps that could “affect a fair understanding of the named executive officer’s compensation for the last fiscal year.” [Mar. 4, 2011]
Sidenote: In his “Proxy Disclosure Blog,” Mark Borges gives us the latest say-when-on-pay stats: with 365 companies filing their proxies, 49.8% triennial; 4.6% biennial; 40.2% annual; and 5.4% no recommendation.