Companies that had their 2007 proxy disclosures well in hand as they rang in the new year need to think again, thanks to a last-minute change to the Securities and Exchange Commission’s executive compensation disclosure rules that rewrites how companies should value and disclose equity compensation.
Released late on Dec. 22—just before much of Corporate America went on vacation for the holidays—the interim final rules now require companies to state the value of stock and option awards over the entire lifespan of the award, rather than the full, fair value of the award at the time the grant was made. The changes must appear in the new Summary Compensation Table and Director Compensation Table, which will appear for the first time in companies’ proxy statements this spring.
