The Securities and Exchange Commission will be on the lookout for clear analysis from companies in this year's proxy statements about how their board directors and senior executives are compensated, including the use of performance targets, a senior SEC staffer said Friday.
"We continue to find that companies are explaining in exhausting detail the framework in which they made their compensation decisions rather than explaining the decisions themselves," Shelley Parratt, deputy director of the SEC's division of corporate finance, said at a securities law conference sponsored by Northwestern Law.
The SEC approved rules last month requiring public companies to disclose how compensation policies give incentives for risk-taking. Parratt encouraged companies to disclose performance targets that are set for board directors regardless of whether the benchmarks are met or even ignored by boards' compensation committees.
