Several news outlets are reporting the release of over 300 letters from the SEC to U.S. companies requesting more information on executive compensation. There have been murmurs from the SEC for months that these requests would be coming, along with a report due out this Fall that will detail lackluster executive compensation disclosure from the most recent proxy season. The following represents a composite of some of the SEC’s requests:
- Why was the chief executive’s pay “significantly higher” than the rest of the company’s highest-paid executives?
- How does the company target each element of compensation against other companies used to benchmark executive pay?
- Provide analysis about how you determine the amount and formula for each element of pay.
- Provide analysis of why you paid each level and form of compensation.
Some commentators are suggesting the SEC’s waive of comment letters is not over and is a response to overly-conservative interpretations of new disclosure requirements. Generally, letters are made public 45 days after correspondence with a company is closed.