February 25, 2021
Another Perks Enforcement Action!
– Liz Dunshee
Yesterday, the SEC announced it had settled charges against a gas exploration & production company and its former CEO for failing to disclose $650,000 worth of perks. Here’s an excerpt from the press release:
The SEC’s separate orders against Gulfport and Moore find that, from 2014 to 2018, Gulfport failed to disclose approximately $650,000 in executive compensation in the form of perquisites received by Moore, and also failed to disclose certain related person transactions involving Moore. According to the orders, the undisclosed perquisites included the cost of Moore’s use of Gulfport’s chartered aircraft for certain travel.
The undisclosed perquisites also included costs associated with Moore’s use of a Gulfport corporate credit card for personal expenses that he did not repay on a timely basis, which resulted in Gulfport extending Moore interest-free credit and carrying a related person account receivable. The orders also find that Gulfport failed to disclose that it paid Moore’s son’s landscaping company approximately $152,000 in 2015 for its services. The order against Moore further finds that Moore caused Gulfport’s violations by failing to supply required information that would have allowed Gulfport to identify and disclose the perquisites and related person transactions.
Similar to the perks enforcement action last fall, the Commission highlighted that it considered the company’s cooperation and prompt remedial acts when determining whether to accept the settlement offer – and this time, there was no penalty at all imposed against the company. Here’s what those efforts included:
– Replacing key personnel
– Developing an internal internal audit function
– Enhancing existing policies & procedures
– Instituting new review & tracking processes
This is the third perks settlement that the SEC has announced since last June – we list all the cases in our “Perks” Practice Area. To make sure that your company is disclosing everything it needs to, make sure to check out our 102-page chapter on Perks & Other Personal Benefits as part of Lynn & Borges’ “Executive Compensation Disclosure Treatise” posted on this site. If you attended our “17th Annual Executive Compensation Conference” last fall, you can also use the video archives to refresh your memory on the two-step analysis.