In the late summer and fall of 2022, twelve years after passage of the Dodd-Frank Act, the SEC finished the last two rulemakings required by the statute. The first (“Pay versus Performance”) requires relatively complex disclosures to compare compensation “actually paid” to executive officers to various company performance measures. The second requires securities exchanges to adopt standards that require listed companies to adopt policies for the recovery (i.e. “clawbacks”) of “erroneously awarded incentive compensation” received by both current and former executive officers. Both sets of rules require complex judgments and decisions as companies adopt new policies and prepare new disclosures. Please join Gary M. Brown of Nelson Mullins Riley & Scarborough LLP and SEC Institute Director George M. Wilson as they discuss the details of these complex new rules and the implementation steps required.
In this Briefing faculty will:
- Review the details and implementation challenges of the SEC’s new pay versus performance rules – 40 Minutes
- Overview the format of the required tabular information and related disclosures
- Discuss the required line items for the principal executive officer and averages for named executive officers in the table
- Discuss issues in identifying other required financial performance measures, including computation of peer group total shareholder return
- Review complexities in computing “compensation actually paid”
- Review required financial performance measure disclosures, including total shareholder return and a “Company-Selected Measure”
- Identify challenges in disclosing the relationship between compensation “actually paid” and the financial performance measures presented in the table
- Explain Inline XBRL tagging requirements
- Review compliance dates
- Review the details and implementation challenges of the SEC’s new compensation recovery or clawback rules – 20 Minutes
- Explain the requirement for exchanges to adopt listing standards
- Discuss provision for companies to adopt policies required by the listing standards
- Requirements within such policies
- Describe how an accounting restatement triggers the requirement to recover “erroneously awarded incentive compensation”
- Explain three-year period considerations
- Review application to both “Big R” and “Little r” restatements
- Discuss measuring amounts and related challenges
- Overview practicality exceptions to requirement to pursue recoveries
- Review disclosures required by the new rule
- Explain Inline XBRL tagging requirements
- Review compliance dates
Who Should Attend: Accountants and attorneys who deal with SEC reporting and disclosure and related accounting issues, including CFOs, controllers and their staff, internal auditors, partners of public accounting firms and their staff, in-house counsel, outside attorneys
Program Level: Update
Prerequisites: None
Advanced Preparation: None
