Corporate governance - Vigil

This Heads Up discusses SEC Proposed Rule Release No. 33-9861, "Listing Standards for Recovery of Erroneously Awarded Compensation," which is aimed at ensuring that executives do not receive “excess compensation” if the financial results on which previous awards of compensation were based are subsequently restated because of material noncompliance with financial reporting requirements. The newsletter highlights key provisions of the proposed rule and their potential accounting and tax consequences to help companies better understand the proposal and determine how (or whether) to comment on it.

In a 3–2 vote at its meeting yesterday, the SEC adopted a Final Rule Release No. 33-9877, "Pay Ratio Disclosure," that requires a registrant to calculate and disclose (1) the median of the annual total compensation of all of its employees (excluding its principal executive officer), (2) the PEO’s annual total compensation, and (3) the ratio of (1) to (2).

The Council of Institutional Investors (CII) believes that proxy access is a fundamental right of longterm shareowners. Proxy access—a mechanism that enables shareowners to place their nominees for director on a company’s proxy card—gives shareowners a meaningful voice in board elections.

Policy Exchange calls on the government to make commuting easier

The Securities and Exchange Commission has published fresh guidance on who qualifies for whistleblower protections under the Dodd-Frank Act, essentially confirming the view that a person is not required to report misconduct to the SEC’s Office of the Whistleblower to qualify for the expanded anti-retaliation protections under the law.

This Heads Up discusses the FASB's recently issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory, which requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures).

[On August 5, 2015] the Council of Institutional Investors (“CII”), a nonprofit association of corporate, public and union employee benefit funds and endowments that seeks to promote effective corporate governance practices for U.S. companies and strong shareholder rights and protections, published a report titled “Proxy Access: Best Practices” that describes CII’s views on seven provisions that companies typically address when implementing proxy access. The CII report is available here, and was discussed on the Forum here.