The Securities Exchange Commission says since new pay disclosure rules were put in place, corporations are falling short in explaining to investors how executives are compensated and for what, the New York Times reports.
The S.E.C. called on corporations to give investors more insight into how they made compensation decisions and to make proxies “clear, concise and understandable,” the paper says. Corporate boards, regulators said, could also do a better job in discussing how they chose performance targets, severance packages and the peer companies they used as comparisons for their pay practices.
“We found ourselves asking this question over and over and over again: Where’s the analysis?” says John W. White, the S.E.C.’s top official in charge of the new rules, calling it the “the biggest shortcoming” of compliance with the new pay disclosure rules.
Federal regulators spent the summer reviewing compensation reports, sending inquiries to companies and chief executives they believed had failed to provide enough information, the NYT reports. Regulators said that the bulk of their requests ask companies to make changes in future filings, though in some cases, they are asking companies to amend this year’s filing. The reviews are continuing, and all correspondence between the S.E.C. and the companies will be published 45 days after issues are resolved.