(The news featured below is a selection from the news covered in Federal Securities Law Reporter, which is distributed to subscribers of Federal Securities Law Reporter.)

White Updates Corporation Finance Initiatives

The Division of Corporation Finance will soon release comment letters based on its review of executive compensation disclosure in several hundred filings from the latest proxy season, and is preparing guidance for those companies not reviewed, according to Director John White. He discussed executive compensation disclosure and the status of many other departmental initiatives in a mid-year update before the American Bar Association's Committee on Federal Regulation of Securities in San Francisco, California.

With regard to executive compensation disclosure, Director White said the staff understands that these are new disclosures and that most companies are acting in good faith to comply. He noted, however, that even though proxies are out and meetings have been held, executive compensation information is incorporated into Form 10-K, so amendments are a possibility.

During the filing review process, the staff has been gathering information for its planned guidance to companies that were not reviewed, Mr. White said. He believes that report should be released as early as this fall but certainly in time for the next proxy season.

In its review of executive compensation disclosure, the staff has been looking for analysis, he said, particularly on the different components of compensation and on change of control and termination payments. The staff also is reviewing performance targets and whether the description is adequate. He said the staff is seeing many instances of vague disclosure in this area about "individual performance goals and targets" without further discussion. He said the staff also will be issuing many comments seeking clearer disclosure where benchmarking is used, and seeking clarification on who makes compensation decisions, including the roles of the CEO and others in the decision-making process. 

The staff is continuing to review executive compensation disclosure and to post interpretations on its Web site, Director White said. He is not sure whether further rulemaking will be needed, but the staff is not working on any right now. If the rules need to be modified at all, that would be a project for next summer, he said.

The staff is still busy in the area of improving the implementation of Sarbanes-Oxley Act Section 404, according to the director. After the recent release of management guidance and the approval of the PCAOB's Auditing Standard No. 5, the staff is now working to ensure they are implemented properly. Mr. White said the SEC's Office of Economic Analysis will be studying the impact of the guidance and the new auditing standard. In addition, the staff is developing a concise, easy-to-read guide for smaller companies as they prepare to comply with the management assessment requirement for the first time this year, he said.

Mr. White noted that some people have asked whether non-accelerated filers can expect further extensions from the staff for compliance with Section 404. Nothing is planned, he said, and calendar year non-accelerated filers should be preparing for their first management assessment at the end of this year. The first audits of internal control over financial reporting are not required until 2008, he noted.

The director also discussed the two proxy access proposals released in July 2007 and reminded the audience that public comments are due by October 2, 2007. He reiterated Chairman Christopher Cox's statement that the SEC is committed to having a rule in place this fall so that filers will know the SEC's position for the upcoming proxy season. 

Mr. White said the staff also is considering many other issues that were raised at its recent proxy access roundtables, including New York Stock Exchange Rule 452, empty voting, over-voting and shareholder communications. He could not predict when the agency would address these issues formally, but said the staff is carefully considering the feedback it received on them.

While on the topic of proxies, Mr. White noted that the staff received and responded to 356 shareholder proposal no-action letters under Exchange Act Rule 14a-8 this year, which was slightly less than the 370 it handled last year. He said the most popular proposals this year were majority vote and "say on pay" proposals.