Assigning Value to Long-Term Incentive Pay

Mon, 28 Jan 2013 14:32:04 +0000

Posted by Joseph E. Bachelder III, McCarter & English, LLP, on Monday, January 28, 2013

Editor's Note:

Joseph Bachelder is special counsel in the Tax, Employee Benefits & Private Clients practice group at McCarter & English, LLP. This post is based on an article by Mr. Bachelder, with assistance from Andy Tsang, which first appeared in the New York Law Journal.

“Then you should say what you mean,” the March Hare went on.

“I do,” Alice hastily replied; “at least—at least I mean what I say—that’s the same thing, you know.”

“Not the same thing a bit!” said the Hatter. “You might just as well say that ‘I see what I eat’ is the same thing as ‘I eat what I see’!”

Alice in Wonderland, Lewis Carroll (1865)

The Preamble to SEC Disclosure Regulations (2006) [1] states: “We believe that plain English principles should apply to the disclosure requirements that we are adopting, so disclosure provided in response to those requirements is easier to read and understand. Clearer, more concise presentation of executive and director compensation…can facilitate more informed investing and voting decisions in the face of complex information about these important areas.”

To which the Mad Hatter might have responded: “You can assume plain English conveys clear thinking, but what happens if plain English is not fed by clear thinking?”

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The Harvard Law School Forum on Corporate Governance

Assigning Value to Long-Term Incentive Pay