SEC Adding Software To Help
Evaluate Exec Pay, Perks
DOW JONES NEWSWIRES
March 19, 2007 2:14 p.m.
By Judith Burns
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The Securities and Exchange
Commission will provide an easy way for investors to sift through data
on executive compensation at hundreds of large U.S. companies, SEC
Chairman Christopher Cox said Monday.
Cox reiterated the SEC's plans to "tag" executive
compensation data for hundreds of U.S. firms, and make it available on
the SEC's Web site. In addition, Cox announced that the SEC will add
free software to its site that enables users to read the tagged data.
"We're working on it and it should be up in June," Cox said at an SEC
roundtable discussion on tagging data, a technology that makes it easier
to find and compare financial results.
Richard Bennett, chief executive of The Corporate
Library, which analyzes corporate information, speaking at the same
event, said he's thrilled with the SEC's efforts to highlight corporate
pay and perks. New SEC disclosure rules for executive compensation,
which took effect starting this year, already are exposing perks such as
aircraft and auto leases, security systems, financial advice and
"gross-ups" given to executives to cover taxes owed on the perks, said
Bennett. A new Corporate Library study found some firms spent up to 10
times more on perks in 2005, and Bennett said he thinks most were "newly
reported" rather than "newly awarded."
SEC corporation finance division director John White
said using software such as extensible business reporting language to
tag financial data, including stock option grants, will help analysts,
investors and regulators. Since data tagging simply converts information
already provided into a more user-friendly format, it won't require
separate scrutiny from company's outside auditors, even for companies
that are newly embarking on data tagging, Cox stressed.
Altria Inc. (MO), Comcast Corp. (CMCSA), Dow Chemical
Co. (DOW), Ford Motor Co. (F) and Ford Motor Credit Co., General
Electric Co. (GE), Pfizer Inc. (PFE), South Financial Group Inc. (TSFG),
and 3M Co. (MMM), are among a few dozen corporations already
experimenting with using data tags for key financial data. Bennett said
by taking part, companies show "they're investor-friendly" and "have
nothing to hide," and expressed hope that tags will one day extend to
non-financial data.
Mutual fund companies are gearing up for a similar
test, which Vanguard Group Chairman and Chief Executive John Brennan
predicted would benefit fund investors. He encouraged the SEC to
consider other changes that would allow mutual funds to substitute
short, online descriptions of funds for long, printed prospectuses,
suggesting that could save mountains of paper and postage for firms such
as Vanguard, which mails 20 million such documents a year.
-By Judith Burns, Dow Jones Newswires; 202-862-6692;
Judith.Burns@dowjones.com
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