Credit Union Weighs in on SEC Exec Comp Disclosure Proposal

WASHINGTON – A steady stream of comments are coming in on a proposal from the Securities and Exchange Commission on its proposal to amend disclosure requirements for executive and director compensation. At issue, the agency has called for providing clearer disclosures written "in plain English" on compensation earned by a company's top executives. So far, $25 million Roanoke Valley Federal Credit Union is the first credit union to speak out on the proposal. President/CEO Kathy Wheby suggested the SEC keep one of the performance graphs because it is "concise and easy to understand." The SEC said it would continue using the Summary Compensation Table, which lists all of the ways officers are compensated but include a column for total compensation. Two supplementary tables disclosing information on performance-based awards and all other equity awards is also being proposed. "I sincerely hope you are able to get corporations to abide by the plain-English rules, as I have not read many proxy statements that are ever in anything but legal jargon," Wheby said. "At times it is almost like reading information in another language." Wheby also said "the number of tables the SEC is proposing is too high." She also expressed concern with the "millions of dollars" the proposed rules will generate for law firms. "As a CEO, I am familiar with how much lawyers are paid to make sure that disclosure is done properly, and I fear that you have underestimated the total costs to the public companies, over the course of the next few years," Wheby said. "You also make no reference to the costs dropping back down after these changes are implemented. Companies should bare the costs for properly informing their shareholders, but you need to give them time to prepare for such costs." The SEC was accepting comments on the 17 CFR Parts 228, 229, 239-Executive Compensation and Related Party Disclosure proposed rule until April 10. Since January, the agency has received more than 60 comment letters. -msamaad@cutimes.com