The Advisors' Blog

Earlier this year, we blogged about two enforcement actions involving compensation-related disclosure failures — one predominantly related to personal use of a corporate plane and one concerning both perks and related-party transaction disclosures.  In light of these and other enforcement actions involving companies with inadequate compensation-related disclosure controls, this Bryan Cave blog suggests that companies review their existing disclosure controls and procedures in this area to make sure they address these areas:

– The use of corporate-owned or charter aircraft, including proper accounting for any personal use
– The identification, valuation, documentation and tracking of other perquisites
– The identification, documentation and tracking of related person transactions, including procedures to identify relevant covered persons, such as relatives of directors and executive officers and their respective businesses
– Training of staff in the scope, definition and valuation of perquisites and related person transactions

The blog also recommends the following, which I would argue are a “must have” given how difficult it can be to identify and track perquisites without these controls:

– Adding or expanding perquisite questions in annual D&O Questionnaires
– Coordinating with the Compensation Committee and HR department to establish and enforce policies and procedures for approving perquisites
– Coordinating with the HR or Executive Compensation departments to document and track perquisites

– Meredith Ervine