SEC Pondering Comp Disclosure Expansion

June 3, 2009 ( - Federal securities regulators plan to put forward new rules expanding compensation disclosures beyond the current mandates involving a company's five highest-paid executives.

Securities and Exchange Commission (SEC) Chair Mary Schapiro disclosed the agency’s intention during Congressional testimony Tuesday, the Wall Street Journal reported.   

According to the Journal, the proposals wouldn’t mandate a specific compensation dollar amount for the new disclosures, but would have to indicate generally how lower-ranking employees are paid, especially when it affects the company’s overall risk management.The SEC is also expected to seek information about the overall design of the company’s pay structure and how compensation relates to an employee’s long-run performance.

The Commission also may require companies to explain their ties to compensation consultants who often negotiate lavish pay packages for top executives.

Schapiro told lawmakers the rules could be taken up by the agency next month, would then go through a public-comment period and, finally, require final approval by the agency. The Journal said the proposal is part of a review of executive pay policies at the SEC and other agencies.

According to the news report, the SEC sought in 2006 to require companies to disclose the compensation of highly paid nonexecutives, but industries successfully pushed back, saying the information was akin to a trade secret and disclosing it could allow rivals to steal employees.