SEC Proposed Rules on Executive Compensation

Summary Compensation Table for the last three (3) fiscal years
Following is expected to be included in the proposed table, as described in webcast of Securities and Exchange Commission open commission meeting on Jan. 17, 2006:

• Total compensation (first column in the new table), which will be sum of remaining columns. This will respond to concerns that current disclosure does not permit calculation.
• Annual salary and bonus, [as is currently the case in executive compensation disclosures].
• Dollar value of stock and option incentives at grant date fair value (FV), calculated in accordance with FAS123(R). Click here for more information about the proposed stock option related disclosures.
• Cash incentive awards not tied to performance of stock will continue to be reflected in year performance measure is satisfied and payment earned.
• "All other compensation" column (any other item, whatever it may be, that does not fall into the above categories). No item of compensation can be excluded from table because it does not fall under a category enumerated in the table; it would have to be included in the "all other compensation" column. Among other items, the "All other compensation" column would include (but not be limited to):
  • aggregate increase in pension plan value actuarial value during fiscal year,
  • all company contributions and all earnings on deferred compensation
  • tax gross-ups and similar payments,
  • perks and other personal benefits. Perks would have to be disclosed, unless aggregate less than $10,000, down from current $50,000 threshold for exclusion.
• " This table, as well as each of the other tables described in the proposals, would be followed by additional narrative disclosure of material factors necessary to an understanding of the information provided in the tables.

See also information on Supplementary Tables to the Summary Compensation Table, and other proposed requirements for executive compensation, on the main summary page here.

Prepared Jan. 19, 2006 by Edith Orenstein (eorenstein@fei.org), Director, Technical Policy Analysis, Financial Executives International (FEI) and Cheryl de Mesa Graziano (cgraziano@fei.org), VP Research and Operations, Financial Executives Research Foundation (FERF), based on listening to the webcast of the SEC meeting. This summary does not represent FEI opinion, unless specifically noted above.