WASHINGTON, January 16, 2006 – LAWFUEL – The Law News Network – The Securities and Exchange Commission is scheduled to vote tomorrow on proposed changes to executive pay disclosure rules. Jonathan M. Ocker, an Orrick lawyer who specializes in executive compensation, predicts a wide impact for the new rules, which would force companies to divulge more specific information about their executives’ total compensation, including stock options, bonuses, perquisites and retirement benefits.
“As a result of recent executive pay scandals there has been a shift in the way people look at executive pay from Wall Street to Main Street,” said Ocker. “Instead of justifying executive pay based on reports regarding peer group benchmarking, compensation committees are now focusing on how their decisions will look in the newspaper. Because of the new disclosure rules committees will begin to scrutinize perqs, change of control severance arrangements, mega- equity grants and SERPs.”
The rules follow in the wake of rising shareholder criticism of the lack of transparency in executive compensation, a subject that started heating up during the late 90s tech boom and reached a high boil in early 2004 when New York State Attorney General Eliot Spitzer sued former New York Stock Exchange Chairman Richard Grasso, seeking the return of some of Grasso’s $187 million pay package.
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