<nobr>Jul 27, 2006</nobr>

SEC Adopts Changes to Executive Compensation Disclosure Rules

The Securities and Exchange Commission has adopted new rules regarding the disclosure of executive compensation in proxy, information, and registration statements filed on or after December 15, 2006, as well as certain audited financial reports. Although the text of the rules is not available yet, a Covington & Burling summary of the the new rules, as described yesterday by staff at an open SEC meeting, is attached.

The new rules make a number of changes to the SEC guidance on executive compensation disclosures. Among the highlights are:

* The inclusion of a new narrative section called Compensation Discussion and Analysis that discusses the material factors underlying the company's executive compensation policies;
* A new, streamlined compensation committee report;
* New SEC guidance on option grant practices; and
* Changes to the Summary Compensation Table, including changes to the rules regarding the named executive officers covered in the table, and new disclosures regarding total compensation.

The SEC also adopted several changes to the disclosure rules regarding director compensation, related person transactions, and pledges of stock. The final rules are expected to be published in the next several weeks. ERIC will issue a member alert with the new rules when they are released.

Vanessa A. Scott, Legislative Counsel
The ERISA Industry Committee
1400 L Street, NW Suite 350
Washington, DC 20005
Tel: 202.789.1400 Fax 202.789.1120
http://www.eric.org

Text Files:

SEC Rules

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