We have blogged several times about the SEC Enforcement Division’s frequent perks enforcement actions and the messages they send.  Among the companies where the SEC has found problems identifying and disclosing perks are:

• • Gulfport – February 2021
  • ProPetro Holding Corp – November 2021
  • National Beverage – August 2021
  • Hilton – September 2020
  • ARGO Group Holdings – June 2020
  • Sito Mobile –August 2019
  • Dow – July 2018
  • Energy XXI – July 2018
  • Provectus – December 2017
  • MusclePharm – September 2015
  • Tyson Foods – April 2005
  • GE ­– September 2004

On March 2, 2023, the Division announced its latest perks-related cases against The Greenbrier Companiesand its founder and former CEO, William A. Furman.  Both cases dealt with failure to disclose perks of approximately $329,000 and failure to disclose related-party transactions in which Greenbrier paid Furman for the use of his private airplane.  According to the Greenbrier Order, the company lacked appropriate internal controls to identify and record perks and related-party transactions.  As a result, both the company’s proxy statements and Form 10-K reports contained material misstatements.

In the Greenbrier Order, the SEC noted that the company undertook significant remedial actions.  Greenbrier and Furman both entered into cease-and-desist orders.  The company paid a $1,000,000 penalty and Furman paid a $100,000 penalty.

Perks identification and disclosure are clearly areas where financial reporting management and disclosure committees should review company policies, ensure that appropriate controls are designed and operating effectively, and carefully review related disclosures.

As always, your thoughts and comments are welcome!