Corporate Governance

SEC Unveils Web-Based ?Executive Pay Finder?

By Jim Hodgson

In late December, the SEC launched the first web-based utility that allows investors to compare the executive compensation packages at 500 of the nation?s largest corporations.  The database, linked here, is extremely easy to navigate and very complete:  it includes -- for each of the covered corporations? five highest paid executives -- information on salary, bonus, stock awards, option awards, non-equity incentive plan compensation, changes in pension value and nonqualified deferred compensation earnings, and all other compensation.  This data can be sorted and viewed in a number of useful ways; and it can be downloaded into Microsoft Excel for inclusion in a user?s own proprietary systems and software programs.

SEC Chairman Christopher Cox cited quicker and better compensation analysis and better-informed shareholders as the motivating factors behind introduction of the database.  ?Gone are the complicated data expeditions that forced investors to hunt through financial statements, footnotes, proxy statements, and other disclosure documents to figure out how much a company pays its top executives,? he said.

The SEC should be commended for its proactive efforts to increase the transparency of executive compensation.  And it should be encouraged to keep this information current.  For as we have been reporting in the pages of PomTalk over the last several months (see numerous posts under Executive Compensation), there is growing dissatisfaction with the lack of candor in executive compensation disclosure at many of America?s largest corporations.  This sentiment is also widespread -- coming from the SEC, shareholder advocacy groups, and individual shareholders alike.  In short, the "Executive Pay Finder? database represents a significant step in the right direction toward curing this dissatisfaction.  And, if it proves useful enough to investors -- and by all rights, it should -- perhaps the Commission will find incentive enough to expand its coverage to a much greater number of public corporations.

Full post as published by PomTalk on January 10, 2008 (boomark / email).