{"id":7684,"date":"2025-02-18T16:27:52","date_gmt":"2025-02-18T21:27:52","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=7684"},"modified":"2025-02-18T16:27:56","modified_gmt":"2025-02-18T21:27:56","slug":"a-proxy-reminder-enforcement-focus-on-perks-disclosure-continues","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/a-proxy-reminder-enforcement-focus-on-perks-disclosure-continues\/","title":{"rendered":"A Proxy Reminder – Enforcement Focus on Perks Disclosure Continues!"},"content":{"rendered":"
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As companies prepare for their next proxy statement, the SEC Enforcement Division has sent a reminder to focus carefully on perks disclosures.\u00a0 In the latest of its on-going series of perks related enforcement actions, on December 17, 2024, Express, Inc<\/a>. was charged with failure to disclose $979,269 worth of perks paid to its CEO.\u00a0 (You can read about earlier cases in this blog post<\/a>.)<\/p>\n<\/div>\n

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A majority of the undisclosed perks were related to the CEO\u2019s authorized personal use of chartered aircraft.\u00a0 The company did not use the appropriate definition of perks when analyzing these costs, which resulted in the disclosure failure.<\/p>\n<\/div>\n

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In the related Accounting and Auditing Enforcement Release<\/a>, the SEC noted that its 2006 amendments to executive compensation disclosure requirements in S-K Item 402 clarify that:<\/p>\n<\/div>\n

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\u00a0\u201cAn item is not a perquisite or personal benefit, if it is integrally and directly related to the performance of the executive\u2019s duties. Otherwise, an item is a perquisite or personal benefit if it confers a direct or indirect benefit that has a personal aspect, without regard to whether it may be provided for some business reason or for the convenience of the company<\/b>, unless it is generally available on a non-discriminatory basis to all employees.\u201d<\/p>\n<\/div>\n

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The 2006 amendments also state that the idea of a benefit that is \u201cintegrally and directly related\u201d to job performance is intended to be very narrow and distinguishes between something provided because the executive needs it to do their job (thus making it integrally and directly related to the performance of duties), and something provided for some other reason, even where that other reason can involve \u201cboth company benefit and personal benefit.\u201d<\/span><\/p>\n<\/div>\n

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According to the SEC, Express \u201cincorrectly applied a standard whereby a business purpose would be sufficient to determine that certain items were not perquisites or personal benefits that required disclosure.\u201d\u00a0 This is very similar to the issue in an earlier case involving Dow Chemical<\/a>.<\/p>\n<\/div>\n

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Express self-reported and cooperated extensively with the Enforcement Division.\u00a0 Based on these actions the company was not fined but did enter into a cease-and-desist order. \u00a0Express was delisted from the NYSE in March 2024 and in April 2024 filed for bankruptcy and terminated its registration.<\/span><\/p>\n<\/div>\n

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As always, your thoughts and comments are welcome.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

As companies prepare for their next proxy statement, the SEC Enforcement Division has sent a reminder to focus carefully on perks disclosures.\u00a0 In the latest of its on-going series of perks related enforcement actions, on December 17, 2024, Express, Inc. was charged with failure to disclose $979,269 worth of perks paid to its CEO.\u00a0 (You … Continue reading A Proxy Reminder – Enforcement Focus on Perks Disclosure Continues!<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[261,96],"tags":[],"coauthors":[154],"class_list":["post-7684","post","type-post","status-publish","format-standard","hentry","category-enforcement","category-sec-hot-topic"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/7684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=7684"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/7684\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=7684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=7684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=7684"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=7684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}