The SEC Stirs the Pot on Executive Comp

Besides including a mandate to list the full cost of stock options, the amendment also requires companies to record options granted in the past few years that are still vesting, he noted. For example, if $5 million worth of options are vesting over the five years from 2003 to 2007, the company would have to list $1 million of that figure in the current proxy statement.

But the SEC seems to have brought on some of the flak by the timing of the delivery of its message. The SEC "pushed this through the last day before Christmas—that tells you something right there,” Boris said. “Now it’s a fait accompli, because even though there’s a comment period, [the rule] takes effect right away." The Council of Institutional Investors will be sending comment letters critical of the change, she noted, “and so will some other large shareowners."

Yet even the SEC's haste had its supporters. The commission's decision to push out its change as close to December 15 as possible made a great deal of sense, according to Weinberg. "A lot of companies are actively working on their new proxies and if there was going to be a change in the rules, it was important to get it out quickly as possible," he added.

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