The Advisors' Blog

On May 5, the SEC proposed amendments that would allow public companies to elect to file semiannual reports on new Form 10-S, rather than filing quarterly reports on Form 10-Q. For companies that may be interested in taking advantage of optional semiannual reporting, should the proposed rules be finalized, there are many considerations to work through — including some executive compensation-related considerations. This Pearl Meyer alert notes that semiannual reporting might implicate:

– Annual incentive plans that are informed by quarterly reporting (e.g., interim performance reviews or explicit quarterly modifiers)

– Existing contractual commitments like incentive-based compensation arrangements tied to quarterly performance (though rare)

– Communicating pay-for-performance alignment (to use only annual or multi-year narratives)

There are also implications related to transactions in the company’s equity, like:

– Potentially longer blackout periods

– The decision to release information more frequently than semiannually to accommodate trading by employees

– Reliance on Rule 10b5-1 plans

Check out our “SEC Rules” Practice Area here on CompensationStandards.com. We’re also hosting a webcast, “The SEC’s Semiannual Reporting Proposal: Considering the Alternatives,” on TheCorporateCounsel.net on Thursday, June 4th, at 2 pm ET. Current members of TheCorporateCounsel.net automatically have access to this webcast. Not yet a member? We’re giving non-members special access to this important program. Register for free access today.

– Meredith Ervine