Public companies may be able to keep nondiscriminatory group health and group life benefits out of the new executive compensation disclosures.
The U.S. Securities and Exchange Commission (SEC) has raised the topic of executive benefits in a proposed rule developed to implement Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Section 951 of the Dodd-Frank Act has added Section 14A to the Securities Exchange Act of 1934. The new section will require public companies to let shareholders participate in advisory votes on executive compensation and “golden parachute” compensation arrangements.
The SEC is proposing that companies subject to the requirements will have to describe nondiscriminatory life and health benefits in Regulation S-K Item 402(t) golden parachute disclosures, but the companies will not have to include the disclosures in other Regulation S-K Item 402 executive compensation disclosures, officials say in a preamble to the proposed rule.
“Group life, health, hospitalization, or medical reimbursement plans” can be left out of executive compensation disclosures, other than golden parachute disclosures, if they “do not discriminate in scope, terms or operation, in favor of executive officers or directors of the registrant” and are “available generally to all salaried employees,” officials say.
Comments on the proposed rule are due Nov. 18.