Watson Wyatt Compensation Discussion and Analysis Scorecard
The Securities and Exchange Commission’s (SEC) proxy disclosure rules, effective for 2007 proxy filings, require extremely detailed and complicated disclosures to be prepared by companies. These rules also require the company to draft a Compensation Discussion and Analysis (CD&A). The CD&A should follow guiding principles issued by the SEC, which require disclosures of information that is material to shareholders’ understanding of the company’s compensation programs.
Because compensation committees are required to attest to the CD&A drafted by management, Watson Wyatt has created a Compensation Discussion and Analysis Scorecard that permits directors to review draft CD&As and evaluate whether the information included would be of value to shareholders. Due to the nature of the SEC rules, this scorecard will require subjective determinations to be made by directors in rating the elements of the CD&A. Nonetheless, we believe the directors that use this tool will be better able to discuss with management the issues that may need more vibrant disclosure.
To access the Watson Wyatt Compensation Discussion and Analysis Scorecard, click on the image on the right.
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