SEC© Considers Revamping Reg S-K

Author: Barbara Baksa

The SEC© staff have finished their review of the disclosure requirements of Regulation S-K and issued a report that includes recommendations for further review.

The JOBS Act of 2012 required the study in respect to disclosures by emerging growth companies, however the SEC© expanded it to cover all companies. Actual changes to Reg S-K have not been determined but can be implemented in the future as the SEC© attempts to clarify executive compensation disclosure.

Here are some interesting facts about executive compensation disclosure that may interest you.

• The executive compensation disclosure rules have been amended more often than any other rules for disclosures required under Reg S-K.
• The executive compensation disclosures, albeit in a very different format, have been around since the very first registration statement (Form A-1) implemented in 1933.
• Back in 1933, the disclosure was required for any directors, officers, or other persons earning in excess of $25,000.  This seems like a pretty low threshold, but then I ran the amount through the Bureau of Labor Statistic’s inflation calculator.  In today’s dollars, that’s around $450,000.
• In 1972, the threshold for disclosure was increased to compensation in excess of $40,000. According to the inflation calculator, that’s around $223,000 in today’s dollars.
• It wasn’t until 1992 that the threshold was increased to $100,000. In today’s dollars, that’s about $166,000.  $40,000 in 1972 was the equivalent of about $134,000 in 1992, so my guess is that we have a ways to go until the SEC© decides to increase the threshold again.

What are your opinions on Reg S-K and executive compensation?