Agenda – SEC Guidance on Exec Comp Puts More Pressure on Boards
January 18, 2022
Companies set to give stock option awards to executives ahead of a significant corporate announcement should take notice of new guidance from the U.S. Securities and Exchange Commission (SEC) that additional disclosures are needed in such cases. The announcement puts further pressure on boards and directors to be transparent and detailed about executive compensation matters in their filings to the authorities and investors.
According to Marc Hodak, a partner at Farient Advisors, the new guidelines are better for transparency and investor relations. If companies have to work harder to reflect the real value of executive compensation packages, then organizations also have to account for the award’s value in their reserves, which may temper how many options are given to executives.
“It may not seem fair [to investors] that management is getting a bump that the rest of the investors can’t benefit from,” said Hodak. “The [guidance] is a small step in favor of creating a perception of fairness in how executives get paid relative to the ordinary workers.”
About Marc Hodak
Partner, Farient Advisors, Dallas
Marc works closely with senior management, boards of directors, and investors, in both public and private companies to develop executive compensation programs that are shareholder-friendly, attractive to management, and responsive to the needs and concerns of boards.
He is a recognized thought leader in incentive plan design. His articles have been published in numerous magazines, including Forbes, NACD Directorship, Directors & Boards, and academic journals. He has been quoted in the national press, including the Wall Street Journal, Bloomberg, and Reuters.
He is a sought-after speaker at forums and conferences throughout the U.S. and Europe on executive compensation, corporate governance, and value management. Marc was named to the 2020 NACD Directorship 100, a list of the most influential people in corporate governance and the boardroom.
For the last 10 years, Marc has taught corporate governance as a professor at NYU’s Stern School and as visiting lecturer at the University of St. Gallen in Switzerland. Before joining Farient, Marc was the principal at Hodak Value Advisors and led value-based management implementation and related projects at Stern Stewart & Co. He earned his MBA in finance from the University of Pennsylvania Wharton School and a BS in aerospace engineering from the University of Maryland.