Non-GAAP reporting is a problem not just with explaining financial results, but also in explaining executive compensation, according to an investor group asking regulators to change their rules.
The Council of Institutional Investors has petitioned the Securities and Exchange Commission with a request that the SEC reconsider its rules regarding uses of non-GAAP accounting metrics in compensation discussion and analysis contained in proxy statements. The CII is appealing to the SEC to amend Regulation S-K to remove an exemption that allows companies to use non-GAAP measures that are not reconciled to GAAP figures in their proxy CD&A.
