“Frankstein’s patching from SEC” from SEC will be due to the detection of executive privileges

“The ability of people to use the general data available to track the movement of the CEO is much easier today,” Peter Chan, a partner in the law firm Baker McKenzi, told CFO Brew. “The truth is that the CEO cannot take off his hat and says,” I am now a private citizen. ”

The high general file of executives and other executives increased the desire to do so – and in some cases, increased. Their families– Obtaining security. The spending of companies on security for senior executives was rising even before Thompson was killed. The average security costs S&P 500 for CEOs 114 % rose Between 2019 and 2023, Glass Lewis analysis appears.

However, SEC considers security spending on security, and requires companies to disclose it as part of the annual executive compensation. Chan, who was previously working on the Supreme Education Council, and his colleague, his partner Baker McKinsey Jennifer Broder, argued that he should change.

They also believe that the Supreme Education Council must rethink the travel of executives as an advantage. Since 2006, when the rules of the Supreme Council for Education Related to Privileges have received their last major expansion, the lines between “personal” and “business” are unclear. Technology has evolved, C-SUITERS panels are now expected to be available around the clock, and to travel repeatedly to offices that may be spread all over the world, and to work on the road, as she and Shan indicated. “But the Supreme Education Council took a wide look of what is considered personal,” said Broder.

SEC Conference Review: The changes may be coming. In June Host a round table Discussion with the executives of the public company and the owners of other interest to review the requirements for detecting executive compensation, and opened a period of general suspension on this topic.

The SEC Paul Atkins chair believes that the area is mature to fix it. He described the current disclosure requirements as a “mixture of Frankstein’s bases” Cushion To comply.

Privileges are one field for review. During the round table, Commissioner Hyster Peres asked whether it should be required Make detailed disclosure Among the amounts spent on executive privileges such as horseback on companies, car services, or housing allowances abroad. She said that such disclosure seemed to be only satisfied The curiosity of the public And “entertainment for onlooker instead of educating the investor.”

Do investors get TMI? It is important that investors have information about privileges, as the Glass Lewis report confirms. A survey from the company found that “the majority of investors expressed concern that excessive places may indicate wider fears of wages,” and that managers should be responsible for limiting excessive Perk compensation.

But the questions remain about whether it is considered that items such as safety and travel as privileges and thus they are part of the executive compensation, or whether it will be more appropriate to classify them as commercial expenses. Chan argues that making some privileges as part of the compensation can make the CEO’s salary look artificially improper. He said he could have “an unfortunate and unfortunate influence to distort information to investors.”

Chan said investors may not need the level of details about the privileges required by the Supreme Education Council. He said that if one of the council decides that the travel of the Executive Director or Security, from appropriate work expenditures, will continue to “have been revealed in the sense that they are grouped in the financial statements.” He said he finds it difficult to see, why will there be such a detailed information “will be, as independent materials, for materials for investors.”

This was the report It was originally published by Financial drink.