The Advisors' Blog

I always look forward to the annual Corporate Governance & Executive Compensation Survey from A&O Shearman. With some wondering whether the newish disclosure requirement about equity awards in relation to MNPI will end up on the cutting room floor as part of the SEC’s disclosure reform initiative, I was curious whether there’s much variation in Item 402(x) disclosure practices to-date. Here’s what the survey found:

– Top 100 companies

– 14% disclosed an equity grant proximate to the release of material non-public information

– 10% said they expressly prohibit in their insider trading or other policy the grant of awards when the company is in possession of MNPI

– 27% do not disclose a written policy, but do disclose a practice of not granting awards when the company is in possession of MNPI

– 53% of companies have pre-determined grant dates that do not factor in MNPI

– 10% have no policies or practices related to grants in proximity to MNPI

– S&P 500 companies

– 10% disclosed an equity grant proximate to the release of MNPI

– 10% said they expressly prohibit in their insider trading or other policy the grant of awards when the company is in possession of MNPI

– 35% do not disclose a written policy, but do disclose a practice of not granting awards when the company is in possession of MNPI

– 42% of companies have pre-determined grant dates that do not factor in MNPI

– 14% have no policies or practices related to grants in proximity to MNPI

– Russell 3000 companies

– 9% disclosed an equity grant proximate to the release of MNPI

– 10% said they expressly prohibit in their insider trading or other policy the grant of awards when the company is in possession of MNPI

– 40% do not disclose a written policy, but do disclose a practice of not granting awards when the company is in possession of MNPI

– 33% of companies have pre-determined grant dates that do not factor in MNPI

– 17% have no policies or practices related to grants in proximity to MNPI

Other compensation topics covered this year include perks, pay versus performance, human capital management, and say-on-pay.

– Liz Dunshee