October 17, 2006. The SEC’s New Executive Compensation Rules or What is a PFO and Why Should I Care? FEI Briefing. Christopher McGee Washington, DC. The Process and the Substance of Compensation Disclosure Have Changed. Full disclosure means full disclosure Not business as usual!
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There are 6 new tables that are required for all filers. Details for each table and the associated narratives are included in the Appendix.
The 6 new tables are:
The rules require Narratives to accompany all tables. Details on the required narratives for each table are included in the appendix.
The key theme of the narrative requirements are that they must explain in sufficient detail:
.The description (no table required) must include the following detail:
Summary Compensation Table(values in 000s)
Following the tabular disclosure, a company must provide a narrative description of any material factors necessary to understand the information disclosed in the table, for example:
Grants of Plan-Based Awards
The narrative disclosure following this table must describe the terms of the disclosed awards, for example:
Outstanding Equity Awards at Fiscal Year-End
Option Exercises and Stock Vested
Nonqualified Deferred Compensation
The company must disclose all material factors necessary to understand table, including: