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SEC Seeks New Disclosures When Directors Hedge Securities

Joe Mont | February 9, 2015

Still no pay-ratio, but the Securities and Exchange Commission on Monday cracked into its lingering list of Dodd-Frank executive compensation rules with a proposal to enhance corporate disclosures on directors and employees hedging securities that were awarded to them as performance-based compensation.

The rule would require an annual meeting proxy statement that discloses whether employees and directors are allowed to hedge or offset any decrease in the market value of equity securities granted as compensation, or held directly or indirectly. The intent is to inform shareholders if executives are permitted to purchase financial instruments that allow them to avoid compensation restrictions...

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