The New York Stock Exchange has delayed for another year its plan to scrap the so-called “broker-vote rule” to give issuers more time to digest the implications of the long-standing practice and to ponder other proxy-voting concerns generally. The broker-vote rule, where brokers vote in director elections when their shareholder customers have expressed no opinion […]
Melissa Klein Aguilar
Posted inRegulatory Enforcement
Backdating Study Gives Lawsuits New Ammo
As regulators, prosecutors, and lawmakers continue their scrutiny of stock option backdating, a new study may offer investors more ammunition as they ramp up legal complaints against companies implicated in the much-maligned practice. A study by researchers at the University of Michigan concludes that backdating is costing shareholders big bucks for what amounts to relatively […]
Posted inInternal Controls
Praise For 404 Delay; Using Auditors; More
Companies are cheering the Securities and Exchange Commission’s move to delay the implementation of Sarbanes-Oxley’s Section 404 for non-accelerated filers, even as some continue to press the SEC to do more to ease the compliance burden. In August, the SEC moved to further extend the deadline for non-accelerated filers to comply with Section 404, giving […]
Posted inInternal Controls
SEC Gets Earful On Needed 404 Guidance
The Securities and Exchange Commission has received an earful from the public about the need for more guidance to companies on how to assess internal controls over financial reporting, even as opinions differ deeply on what form that guidance should take and exactly what issues it should address. The SEC announced in July that it […]
Posted inFrom the Archive
Backdating Update; Pay Rule Fallout; More
Securities and Exchange Commission Chairman Christopher Cox told lawmakers last week that his agency is now investigating more than 100 companies for possibly fraudulent reporting of stock option grants, and said more guidance on backdating issues is forthcoming. Cox made his comments as Capitol Hill’s scrutiny of stock option backdating and executive pay abuses rolled […]
Posted inBoards & Shareholders
ISS Sale Rumor Raises Questions On Advice
Institutional Shareholder Services, the most powerful proxy vote adviser in North America and Europe, appears to be for sale, according to published reports. The Rockville, Md.-based advisory firm did not respond to requests for comment, but the governance newsletter Global Proxy Watch, published by Stephen Davis—who also writes a monthly column for Compliance Week—reports that […]
Posted inFrom the Archive
CD&A Consensus: Get Started Immediately
While the particulars of the Securities and Exchange Commission’s newly required “Compensation Discussion and Analysis” disclosure will vary greatly from company to company, there’s one thing experts say all companies should do with regard to the CD&A: Start now. The CD&A disclosure is part of the SEC’s final executive compensation disclosure rule, approved Aug. 11. […]
Posted inFrom the Archive
Comp. Hearings; IPOs; Backdating And S-3s
The head of the U.S. Senate Committee on Finance says he’s exploring the extent of abuse of executive compensation tax restrictions with an eye toward possible legislation. The Finance Committee scheduled a hearing on executive compensation for Sept. 6, to focus on issues regarding executive compensation—including backdating of stock options and tax treatment of executive […]
Posted inFrom the Archive
Campos On Backdating; NYSE And e-Reports
Securities and Exchange Commissioner Roel Campos recently sketched out his views on the principles of good compensation policies corporate directors should follow, even as he warned that directors could also face liability for sloppy stock option programs tarnished by backdating. In an Aug. 15 speech to the Hispanic Association on Corporate Responsibility, Campos said that […]
Posted inFrom the Archive
Backdating Probes Cause Boom In Late Filings
Companies are late filing quarterly reports in record numbers this summer, largely thanks to the first major accounting scandal after Sarbanes-Oxley: options backdating. From Aug. 4 through Aug. 11 alone, nearly 140 companies with market capitalizations above $75 million notified the Securities and Exchange Commission they would be late filing their quarterly reports—up 52 percent […]