The disclosure burden facing public companies is already overwhelming. For example, corporate proxy statements for annual meetings now average between 60 and 80 pages, up from 30 pages a decade ago.
Companies are required to disclose everything from financial performance to executive compensation in these statements, thanks in large part to the Dodd-Frank Act enacted in 2010. The NAM submitted comments to the SEC last year on three of these new disclosures: the “pay ratio” rule and the proposed “pay versus performance” and “clawback” rules. Each proposal is expected to create additional costs and burdens for public manufacturing companies and add to the length of proxy statements without providing any significant benefit to shareholders.
While the SEC has announced it will review existing disclosures to try and improve the benefit of disclosures to both companies and investors, legislation being considered by the House this week is another step in the right direction to make the current system more efficient. The bill (H.R. 1675) includes a provision requiring the SEC to review each significant regulation it issues and determine by a vote if the regulation is ineffective or excessively burdensome and then modernize or repeal the rule.
The NAM supports this type of commonsense legislation that would reduce the time and cost for manufacturers required to comply with both new and old disclosure requirements, while also benefitting shareholders.
Speech by Keith F. Higgins, Director, Division of Corporation Finance. November 17, 2015. https://www.sec.gov/news/speech/executive-compensation-beyond-dodd-frank.html#_ftn27
Before joining the NAM, Crooks served as senior manager of government affairs for Financial Executives International, where she advocated on behalf of the association’s membership of senior-level business executives on tax, corporate treasury, pension and benefit issues. Previously, she worked as a legislative assistant to Rep. Michael Castle (R-DE), a senior member of the House Committee on Financial Services. Christina handled financial services issues for the Congressman during consideration of the Dodd-Frank Act, and also worked on small business and judiciary issues. Christina earned a B.A. in Political Science from the University of Delaware and a M.A. in Political Science from American University.
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