The nation's largest publicly traded financial companies can expect close scrutiny of their financial statements and disclosures on executive compensation from the Securities and Exchange Commission next year, a senior official said Tuesday.
Companies targeted for such reviews will include the nine that have agreed to a $125 billion capital injection from the Treasury Department, John White, the SEC's corporation finance director, said in prepared remarks to an executive compensation conference in New Orleans.
Bank of America Corp., Bank of New York Mellon Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, State Street Corp., and Wells Fargo & Co. have agreed to accept the federal funding, along with Merrill Lynch & Co., which B of A is acquiring.
By law, the SEC must review a public company's annual reports at least once every three years and give special attention to large companies that experience significant volatility in their stock prices. SEC officials plan to pay close attention to disclosure on executive pay and perks along with financial results. Companies that agree to accept Treasury investments, and those that sell troubled assets to the federal government under the Troubled Asset Relief Program, face new restrictions on executive compensation.
Mr. White said annual reports in these companies need to reflect such changes.