As calendar-year companies begin preparing their Compensation Discussion & Analysis for their 2008 proxies, they are caught in the middle of the Securities and Exchange Commission’s desire for a “plain English” description of the “how and why” of executive compensation and the SEC staff’s demand for more detailed information. Those two imperatives come from the SEC’s targeted review of the new executive compensation disclosures filed earlier this year.
Shelly Parratt, deputy director of the SEC Division of Corporation Finance, is conducting the targeted review project, where some 300 of the Fortune 500 companies have received comment letters related specifically to their 2007 CD&As. The second phase is a more comprehensive report, released earlier this month, to provide guidance for preparing the 2008 compensation disclosures—intended for the vast majority of companies whose proxies were not part of the first review process.
