March 21, 2008
SEC Compensation Rules Result in Math But Not Comprehension
What has been the effect of the SEC's new rules on the disclosure of executive compensation in the 2008 proxy materials? Complex mathematical formulas and not much comprehension of the numbers is what the Wall St. Journal found in a page one story. It appears that some companies, frustrated with the SEC's demand for more disclosure, included math that even math wizards may not understand. But working your way through the calculations may not be especially informative; key information, like performance goals for the CEO, are not disclosed for fear of tipping off competitors. WSJ, New Math) x (SEC Rules) + Proxy=Confusion.
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