The Securities and Exchange Commission (SEC) in late July adopted the most significant reforms to executive compensation in the past 14 years. CCH is now publishing Executive Compensation and Related-Party Disclosure: SEC Rules and Explanation, a comprehensive book providing the latest practical guidance to help securities compliance officers and other corporate and securities law professionals understand and apply the changes under the new rules.
'While it remains up to a company's board to decide how much to pay its executives, the new SEC rules now require that companies do provide a clear explanation of how they arrived at both the amount and the measurement,' said Executive Compensation and Related-Party Disclosure author and CCH Lead Securities Analyst James Hamilton, JD, LLM. 'This will require for the first time that investors be provided with one number for total annual compensation for each named executive and that they be provided with a newly mandated narrative, delivered in plain English, that offers clarity and comparability for this total compensation number.'
CCH's Executive Compensation and Related-Party Disclosure details all aspects of the rule changes for professionals including key areas related to providing investors with a clearer and more complete picture of compensation paid to principal executive and financial officers as well as the highest paid executive officers and directors.
In the area of executive and director compensation, the most scrutinized section of the reforms, Mr. Hamilton said investors will see a newly mandated Compensation Discussion & Analysis (CD&A) and an overhaul of compensation tables.
The required compensation tables have been reorganized under the SEC rules into three broad categories to logically provide a picture of total compensation via tables on: compensation, equity compensation, and retirement and other post-employment benefits.
The summary compensation table, the principal disclosure vehicle for executive compensation, now will include a column reporting the total compensation of named executive officers as well as specific columns for a variety of different compensation beyond salary and bonus, including all equity-based awards, and identifying stock and stock options and compensation under non-equity incentive plans and compensation derived from perquisites. A narrative also will accompany the summary compensation table, and a directors compensation table will follow a similar format and similar narrative.
For more information, call CCH at (800) 248-3248 or visit www.onlinestore.cch.com.