Christopher Cox, the newly confirmed chairman of the Securities and Exchange Commission, is calling on companies to improve their disclosure of executive pay packages, according to Bloomberg’s account of an interview with the Public Broadcasting Service’s Nightly Business Report.
“I think you can look in the near future to the SEC for some improved rules on disclosure to make sure that, for example, shareholders can have one number, that the different kinds of executive compensation add up to a number that’s comparable, executive to executive and company to company,” Cox said in the interview. Investors need such information “in a timely way, before rather than after the fact,” so they can discipline corporate boards that grant compensation packages they view as excessive.
Cox made his comments amid increasing disgruntlement by shareholders who have been trying to rein in executive pay and even, in some cases, to force executives to return some of their compensation.
Earlier this week, of course, a Delaware judge ruled that the board of directors of the Walt Disney Co. did not violate their responsibilities to shareholders when they approved chief executive officer Michael Eisner’s decisions to hire and fire former president Michael Ovitz. The dismissal resulted in a no-fault termination that entitled Ovitz to $140 million in severance.
Cox’s predecessor, William Donaldson, also signaled earlier this year that he wanted boards to reveal more about how they award pay packages. However, no new rules had been introduced, let alone passed, when Donaldson stepped down on June 30.