Federal Securities Laws: Executive Compensation Disclosure Rules (Portfolio 307)

Tax Management Portfolio, Federal Securities Laws: Executive Compensation Disclosure Rules, No. 307, outlines and analyzes the rules and regulations promulgated by the U.S. Securities and Exchange Commission as related to executive compensation disclosure matters. To view this Portfolio, visit  Bloomberg Tax for a free trial.

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Description

Tax Management Portfolio, Federal Securities Laws: Executive Compensation Disclosure Rules, No. 307, outlines and analyzes the rules and regulations promulgated by the U.S. Securities and Exchange Commission as related to executive compensation disclosure matters.

The Worksheets include relevant examples of executive compensation disclosure.

This Portfolio may be cited as Garvey and Soehner, 307 T.M., Federal Securities Laws: Executive Compensation Disclosure Rules.

Authors

Jeremiah G. Garvey, Esq.

Jeremy Garvey focuses his practice on securities-related transactions and corporate governance, specifically in connection with private capital financings, public offerings and other funding, and ongoing representation of emerging growth technology companies and venture firms. He is co-chair of Buchanan Ingersoll & Rooney's Corporate Section. Prior to joining Buchanan, Jeremy was a corporate associate with Ropes & Gray in Boston.

Colgate University, B.A., magna cum laude, GTE/CoSIDA Academic All-American, 1991, Phi Beta Kappa; University of Pennsylvania Law School, J.D., 1995, Articles Editor of the Journal of International Business Law; Affiliations: Section of Business Law Task Force on Legal Opinions in Securities Filings and Transactions, American Bar Association Section of International Law; Co-chair of the Selection Committee (2002–present), Three Rivers Venture Fair; Chair, Board of Directors, Pittsburgh Venture Capital Association; National Association of Corporate Directors; National Association of Stock Planning Professionals; Admitted to Massachusetts, Pennsylvania and Florida State Bars.

Celia A. Soehner, Esq.

Celia A. Soehner focuses her practice on advising public companies with respect to corporate governance, federal securities laws, the stock exchange and executive compensation matters. She also advises clients in connection with mergers and acquisitions and capital market transactions.

Previously, Celia served for more than five years as an attorney-advisor with the U.S. Securities and Exchange Commission (SEC) in the Division of Corporation Finance. While at the SEC, Celia worked on a number of transactional and securities compliance matters specific to large financial institutions, including bank holding companies, investment advisers and alternative investment companies. Celia has experience with securities disclosure issuers affecting initial public offerings, debt and equity offerings and mergers and acquisitions, as well as issuer reporting obligations under the Securities Exchange Act of 1934. Celia received the 2011 Chairman's Award for Excellence.

Prior to joining Morgan Lewis, Celia worked as a corporate finance associate for a large national law firm.

Fordham University, 2005, BA, International Political Economy and French, cum laude; Brooklyn Law School, 2008, JD; Georgetown University Law Center, 2015, LL.M, Securities and Financial Regulation; Admitted to Pennsylvania, New York, and New Jersey State Bars.

Table of Contents

Detailed Analysis
I. Executive Compensation Under the Federal Securities Laws
A. Background and History of Executive Compensation Disclosure
B. Structure of this Portfolio
II. Who Is a Named Executive Officer?
A. Rules and Regulations
1. SEC Regulation S-K Item 402(a)(3)
a. Executive Officer
b. Most Highly Compensated
2. SEC Regulation S-K Item 402(m)(2)
B. Staff Guidance
1. Clawbacks or Forfeited Awards
2. Refusal to Accept Bonus or Other Compensatory Award
3. Executive Officer Serving in Different Capacity for Part of Reportable Year
4. Number of Years Required to be Reported
III. Compensation Discussion and Analysis (CD&A)
A. 2006 Adopting Release
B. 2007 Staff Report
1. Compensation Philosophies and Decision Mechanics
2. Differences in Compensation Policies and Decisions
3. Performance Targets
4. Benchmarks
5. Change-in-Control and Termination Arrangements
C. 2011 Amendments
D. SEC Regulation S-K Item 402(b)
E. Staff Guidance
1. Omission of Performance Targets
2. Benchmarking
3. Non-GAAP Financial Measures
F. Smaller Reporting Companies
G. Trends in CD&A
1. Executive Summaries
2. Supplemental Tables
3. Pay Ratio Disclosure Requirements
IV. Compensation Committee Report
A. Rules and Regulations
1. 2006 Rules
2. SEC Regulation S-K Item 407(e)
B. Staff Guidance
1. Staff Interpretations
2. Comment Letters
V. Summary Compensation Table
A. Overriding Principles
B. SEC Staff Guidance
1. Compliance and Disclosure Interpretations
2. Other Staff Guidance
VI. Perquisites
A. SEC Rules and Regulations
B. Staff Guidance
1. Adopting Release
2. Compliance and Disclosure Interpretations (CDIs)
VII. Equity Tables
A. Grants of Plan-Based Awards Table
B. Outstanding Equity Awards at Fiscal Year-End
C. Option Exercises and Stock Vested
VIII. Required Narratives
IX. Post-Employment Disclosure Requirements
A. Pension Benefits
B. Nonqualified Deferred Compensation
C. Potential Payments Upon Termination or Change-in-Control
X. Director Compensation
A. Rules and Regulations
1. 2006 Adopting Release
2. SEC Regulation S-K Item 402(k)
B. Staff Guidance
1. Compliance and Disclosure Interpretations
2. Comment Letters
XI. Compensation Committee Disclosure
A. Compensation Committee Existence and Charter
B. Consideration and Determination of Compensation
C. Compensation Committee Interlocks
1. Rules and Regulations
2. Staff Guidance
XII. Performance Graph
A. Furnished to the Commission
B. SEC Regulation S-K Item 201(e)
XIII. Say-on-Pay and Golden Parachute Disclosure
A. Rules and Regulations
1. Say-on-Pay
2. Golden Parachute Disclosure
B. Staff Guidance
XIV. Proposed Rules on Clawback Policies

Working Papers

Table of Worksheets
Worksheet 1 Executive Summary Examples
Worksheet 2 Starbucks Corporation — Compensation for Fiscal 2014 Performance Table
Worksheet 3 Sample Say-on-Pay Resolution and Sample Golden Parachute Resolution
Worksheet 4 Summaries of Comment Letters on $10,000 Perquisite Disclosure Threshold
Worksheet 5 SEC Comment Letters Issued to TripAdvisor, Inc. (Aug. 21, 2014 and Sept. 19, 2014)
Worksheet 6 SEC Comment Letter Issued to Regional Management Corp. (June 10, 2011)
Worksheet 7 SEC Comment Letter Issued to Timken Co. (Sept. 26, 2007)
Worksheet 8 SEC Comment Letter Issued to Chevron Corp. (Aug. 21, 2007)
Worksheet 9 SEC Comment Letter Issued to Caterpillar Inc. (Aug. 21, 2007)
Worksheet 10 SEC Comment Letter Issued to Northern Trust Corp. (Sept. 26, 2007)
Worksheet 11 SEC Comment Letter Issued to Southwest Airlines Co. (Aug. 21, 2007)
Worksheet 12 SEC Comment Letter Issued to AT&T Inc. (Sept. 27, 2007)
Worksheet 13 SEC Comment Letter Issued to Yadkin Financial Corporation (Apr. 22, 2014)
Worksheet 14 SEC Comment Letter Issued to Channel Advisor Corporation (June 6, 2014)
Worksheet 15 SEC Comment Letter Issued to Imperva Inc. (Aug. 12, 2014)
Worksheet 16 SEC Comment Letter Issued to Hortonworks Inc. (July 24, 2014)
Worksheet 17 SEC Comment Letter Issued to Benchmark Electronics Inc. (July 2, 2015)
Worksheet 18 SEC Comment Letter Issued to Ingles Markets Inc. (Feb. 5, 2015)
Worksheet 19 SEC Comment Letter Issued to Green Hunter Resources Inc. (Oct. 7, 2014)