Archives: Disclosure

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New Nasdaq Disclosure Requirement–Third-Party Payments to Directors

Effective August 1, 2016, new Nasdaq Rule 5250(b)(3) requires Nasdaq-listed companies to disclose the material terms of all agreements and arrangements between a director or director nominee and a third party related to “compensation” or “other payments” for a director’s service as a director or for a nominee’s candidacy. What payments must be disclosed? The … Continue Reading

New SEC Guidance Helps Close the GAAP

As recently as last month I wrote about the SEC’s heightened focus on non-GAAP financial measure disclosures, evidenced by recent pronouncements from SEC Chair Mary Jo White, PCAOB Chair James R. Doty, SEC Commissioner Kara M. Stein and SEC Chief Accountant James Schnurr. (See this Doug’s Note.) Others have made similar comments since then. As … Continue Reading

Accounting Standard Transition Disclosures–A Reminder from the SEC

New accounting standards appear with metronomic regularity. Some are minor and technical, while others clearly will have major consequences once they take effect. Recent additions include new standards for revenue recognition, lease recognition and financial instrument classification and measurement. And according to Wesley R. Bricker, Deputy Chief Accountant of the SEC, in his recent remarks … Continue Reading

The Next Level of Investor Communication

Last year about this time General Electric made a splash with its revamped Form 10-K, which it augmented with a short video introduction from its CEO, Jeff Immelt. (See this Doug’s Note.) This year, GE launched what it calls an Integrated Summary Report, which it describes as “the latest step in contemporizing…investor communications” and is … Continue Reading

Beefing Up Director Compensation Disclosures

With calendar year companies currently in the midst of drafting their proxy statements, it is time to consider the often overlooked director compensation disclosures. Changes in director compensation arrangements. Director compensation continues to increase in amount and complexity as companies strive to keep up with directors’ increasingly burdensome duties. For example, boards are now taking … Continue Reading

Earnings Release Pitfalls and Reminders

It’s the time of year when calendar-year-end public companies gear up to release their annual earnings. Therefore, as you dust off last year’s earnings release, it may be helpful to consider some pitfalls experienced by even the most compliant companies. Excessive, confusing or inconsistent non-GAAP financial measure disclosures. It is understandable that companies want to … Continue Reading

Join Us at the Winter 2016 Public Company Forum

You will soon receive an email invitation to our upcoming Public Company Forum. If you have previously attended, you know that the PCF is a semi-annual, multidisciplinary, interactive forum devoted specifically to the issues faced by public companies. The Winter 2016 session will be held on Friday, January 22nd at the Le Meridien/Sheraton Hotels’ shared … Continue Reading

Political Spending Disclosure Goes Mainstream

Political spending disclosure has had an irregular history, waxing and waning over the last decade according to a seminal Supreme Court decision, fluctuating SEC rulemaking and activist shareholder agendas and evolving views of good corporate practice. Back in January 2014, I speculated that “voluntary political spending information may be on its way to ‘best practices’ … Continue Reading

NYSE Amends Its Notice and Trading Halt Rule

The New York Stock Exchange has amended Section 202.06 of the NYSE Listed Company Manual to: expand the pre-market hours during which NYSE-listed companies must provide prior notice of material news, expand the circumstances under which NYSE may halt trading, and provide guidance related to the release of material news after the close of trading. … Continue Reading

The SEC Considers Updating Audit Committee Disclosures

The SEC recently published a concept release seeking comment on the need for new audit committee disclosures. This follows on the heels of recent PCAOB pronouncements and proposals regarding audit engagement partner disclosures in a new form to be filed with the SEC. (See this Doug’s Note.) The SEC staff noted that the majority of … Continue Reading

At Last–the SEC's Compensation Clawback Proposal

Some five years ago, Section 954 of the Dodd-Frank Act instructed the SEC to adopt rules mandating that national securities exchanges require listed companies to implement incentive compensation recovery (or clawback) policies. Last week, the SEC proposed the long-awaited new rules, which SEC Chair Mary Jo White described as “the last of the Dodd-Frank Act … Continue Reading

Liability for Statements of Opinion–New Clarity from the Supreme Court

The U.S. Supreme Court’s recent decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund resolved a clear split in the federal courts of appeal regarding when statements of opinion may give rise to liability under the securities laws. In a victory for public companies and their officers and directors, the Court held, … Continue Reading

The New Pay-for-Performance Proposal–A Misstep by the SEC

  The SEC last week finally proposed rules mandated by Dodd-Frank providing for disclosure of the relationship between compensation actually paid to executives and company financial performance. While it is important to remember that Congress, not the SEC, initiated this rulemaking (meaning that the staff probably wishes it didn’t have to be sidetracked by this … Continue Reading

Two Oft-Neglected Cybersecurity Protections

With each passing year, cybercrime moves further into the mainstream of public company existence. What until recently was mostly an annoying, abstract concern for a handful of companies is now a daily menace that impacts every company in every industry. Most companies now acknowledge the risks and have implemented plans to combat them. Time will … Continue Reading

The New Revenue Recognition Standards–What Lawyers Should Know

Last year, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for accounting for revenue arising from customer contracts. When it becomes effective (for fiscal years beginning after December 15, 2016), the new standard will replace most existing revenue recognition guidance. Its goal is to provide consistency across … Continue Reading

User-Friendly 10-Ks–The Next Step in Shareholder Engagement

Much has been written about the dramatic increase in shareholder engagement from both sides of the relationship. For example, financial and governance roadshows have become mainstream not only among large-cap companies, but increasingly among mid-caps, as well. (See this Doug’s Note.) In addition, many companies have overhauled their proxy statements in an effort to better … Continue Reading

SEC Proposes Long-Awaited Hedging Disclosure Rules

The SEC recently proposed rules to implement Dodd-Frank-mandated disclosure regarding permitted hedging by officers and directors. If you have been following the post-Dodd-Frank rulemaking saga, you know that this is one of the last rules on the SEC’s list for adoption. The proposed rule… The proposal would add the following new paragraph (i) to Item … Continue Reading

IRS Monitoring of Tax Disclosures

It is not often that I get to (or even want to) write about the tax disclosures contained in the notes to financial statements. However, this recent CFO article highlighted a recent study by professors at Ohio State University and the University of Washington that companies should consider when drafting those disclosures. The study’s findings… Using … Continue Reading

Emerging Sustainability Reporting Standards

Whether they call it ESG (environment, social responsibility and governance), CR (corporate responsibility), sustainability or something else, more and more companies are choosing to voluntarily disclose their efforts and successes in this rapidly developing area of interest. For example, The Conference Board states that the rate of sustainability reporting has doubled just since 2012. Disclosures … Continue Reading

Posting Non-GAAP Financial Measures on Social Media

It is well documented that companies now use social media for all kinds of communications, including “traditional” SEC disclosures. As the scope of the social media disclosures continues to expand, some companies are starting to post non-GAAP financial measures. It is important to remember that any such postings must comply with the SEC’s GAAP reconciliation … Continue Reading