As noted in a prior post, every now and then the SEC Enforcement Division likes to remind companies of the requirement to disclose personal benefits, or perquisites.  I’d even hazard a guess – completely unsubstantiated by research – that enforcement actions regarding perquisite non-disclosure make up a significant percentage of enforcement actions concerning proxy statements. And yet, companies seem to keep forgetting about perks disclosure.  In some cases, the companies’ disclosure controls may not…

  About two years ago, I wrote a post about director compensation, quoting the old saw that pigs get fat but hogs get slaughtered. Given what I’ve been reading of late, I think it’s time for a refresher, but this time I’m discussing executive, rather than director, compensation. With the onset of the COVID-19 pandemic, a number of companies or their executives took action to reduce pay.  In some cases, salaries were reduced to $1…

Aristotle is said to have coined the phrase “nature abhors a vacuum.”  Far be it from me to question Aristotle, but while he was right, I think his view was too narrow — the abhorrence of vacuums goes far beyond nature and extends to investors and the media, among many others.  Companies that hide behind closed doors and ignore or deny requests for information from investors and the media run the risk of finding themselves…

The pandemic seems to raise new challenges every day – or possibly every hour – in both our personal and work lives.  However, at least one of the challenges is not so new; namely, if and when to disclose that a CEO or other senior officer is infected with coronavirus. I have expressed my views on disclosure of a CEO illness a couple of times in the last few years (see here and here).…

Pandemics may come and go, but governance marches on.  That’s the message BlackRock seems to have sent earlier this week, when it distributed its “Engagement Priorities for 2020.”  Of course, the document was completed well before the onset of the COVID-19 pandemic.  However, you’d think that BlackRock, ordinarily a reasonable player in the governance sandbox, would have added a last-minute addendum to the document or at least made public statements acknowledging that the…

Some of our clients and friends may have seen this, but I hope followers of this blog will agree that it bears repeating.  Please stay healthy and safe. Bob Lamm March 16, 2020 Dear Gunster Clients and Friends, We realize this is a difficult and unprecedented time. Our clients, colleagues and communities are foremost in our minds as we continue to closely monitor the COVID-19 outbreak. Our thoughts are with all those presently impacted by the…

The SEC is re-examining one of the most important disclosures companies provide – Management’s Discussion and Analysis, or MD&A.  I’ve read lots of MD&As in my time, and to be completely candid, many of them – or at least too many of them – are poor. There are lots of ways in which MD&As are poor, but my principal complaints are as follows: They don’t provide the “A” in MD&A – the analysis. Sales are…