SEC Compliance & Disclosure Interpretations that Could Affect Proxy Statements

SEC Compliance & Disclosure Interpretations that Could Affect Proxy Statements

Fulcrum Partners Executive Benefits News

One New Compliance and Disclosure Interpretation Potentially Affecting Proxy Statements

Shared from the Executive Compensation Blog by Attorney Michael S. Melbinger.

Earlier this month (May 11, 2018), the SEC’s Division of Corporation Finance issued 45 new Compliance and Disclosure Interpretations (CDIs) on [proxy statement] disclosure. Thirty-five of the new CDIs simply reiterate the guidance provided in the Telephone Interpretation Manual and the March 1999 Supplement, four make technical changes, six make substantive changes, but one could affect companies’ proxy statements next year.  

Question 161.03: If a registrant is required to disclose the New Plan Benefits Table called for under Item 10(a)(2) of Schedule 14A, should it list in the table all of the individuals and groups for which award and benefit information is required, even if the amount to be reported is “0”?

Answer: Yes. Alternatively, the registrant can choose to identify any individual or group for which the award and benefit information to be reported is “0” through narrative disclosure that accompanies the New Plan Benefits Table. [May 11, 2018]

As many readers know, Item 10(a)(2) requires a company to include in its proxy statement the New Plan Benefits Table only when the company seeks approval of a new or amended stock plan in its proxy statement, and it already has made awards under the plan, contingent on stockholder approval. This table normally goes in the company’s Form 10-K.

photo credit: Samuel Zeller

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