July 22, 2020
Disclosure for Cash Bonuses Paid After Form 10-K Filing
– Lynn Jokela
We recently received the following question from a member on TheCorporateCounsel.net Q&A Forum (Topic #10382):
Prior to proxy statement filing a company timely filed its Form 10-K, which included all Part III information.
After the Form 10-K was filed, the company awarded NEO cash bonuses for last year. These bonuses were entirely discretionary and there was no expectation of, or contractual right to, bonuses by the NEOs at the time the Form 10-K was filed.
The Company is now filing its annual meeting proxy statement. The proxy statement will reflect the NEO cash bonuses in the compensation table. Does the company also need to amend its Form 10-K to reflect the bonuses for last year so that the compensation sections of the Form 10-K and proxy statement are identical?
Here was John’s response:
Legally, I think the answer is no. There is nothing in the rules to suggest that a company has an obligation to amend an Exchange Act report that was accurate when it was filed merely because some significant development occurs subsequent to filing. There may be a business issue about whether it is advisable to file an amendment or highlight the updated disclosure in a Form 8-K based on the company’s assessment of the potential for shareholder confusion.
You may want to refer to the article “When, Why & How to Amend an Exchange Act Report” that appeared in the May-June 2019 issue of “The Corporate Counsel.”