From CNN Money:
Corporations will have to give out more and clearer information about the pay and perks of top managers and directors under rules adopted by the Securities and Exchange Commission by a 5-0 vote Wednesday. ...
Chairman Christopher Cox said: "It will demystify any financial dealings between the executives and the companies they work for ... It is not the job of the SEC to judge what constitutes the right level of compensation."
Everytime the SEC amends the rules on executive pay disclosure, somebody at the SEC always says the new rules "will demystify" the process. And, every time, the process remains foggy.
The SEC press release summarizes the new rules:
The amendments will refine the currently required tabular disclosure and combine it with improved narrative disclosure to elicit clearer and more complete disclosure of compensation of the principal executive officer, principal financial officer, the three other highest paid executive officers and the directors.
New company disclosure in the form of a Compensation Discussion and Analysis will address the objectives and implementation of executive compensation programs - focusing on the most important factors underlying each company's compensation policies and decisions.
- The Compensation Discussion and Analysis will be filed and will thus be a part of the disclosure subject to certification by a company's principal executive officer and principal financial officer. ...
Following the Compensation Discussion and Analysis section, executive compensation disclosure will be organized into three broad categories: compensation over the last three years; holdings of outstanding equity-related interests received as compensation that are the source of future gains; and retirement plans, deferred compensation and other post-employment payments and benefits.
