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The Dow Chemical Co. will pay a $1.75 million fine to settle SEC allegations the company didn’t properly disclose $3 million in executive compensation in the form of perks.
Dow agreed to pay $1.75 million to settle allegations it didn’t properly disclose executive benefits such as the personal use of company planes. The company also agreed to hire an independent consultant to review its disclosure policies, according to the July 2 Securities and Exchange Commission settlement order.
In settling, Dow neither admitted nor denied wrongdoing. The company cooperated with the SEC and “could have continued with the matter” but instead chose “to settle to achieve finality and bring clarity to future disclosure decisions,” Rebecca Bentley, a Dow spokeswoman, told Bloomberg Law.
SEC regulations require disclosure of the value of personal benefits to named executive officers when they receive over $10,000 worth of benefits in a single year. Benefits with a personal aspect count as personal benefits, even if they’re provided for business purposes or for the company’s convenience, the order said.
“The expenses at issue were legitimate business expenses authorized by Dow and within the scope of executive job duties,” Bentley said. “This matter was not about whether the expenses should have been incurred, but only how they were classified for disclosure purposes.”
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