By Cydney Posner

In an article in the WSJ today, the article catches up with the fact that a number of the SEC's comment letters and issuers' responses regarding executive compensation disclosure have now been made public. As has been well publicized, one of the areas of focus of these comments has been the failure, in the SEC's view, of issuers to adequately disclose performance targets, including individual performance targets. The article suggests that the "increasing SEC scrutiny could spur changes in how companies calculate compensation, including moving away from individual performance as a measure of success -- one of the areas the SEC focused on as particularly weak -- in favor of companywide financial targets, such as earnings or stock prices." The article quotes practitioners who suggested that issuers have, in some cases, changed their targets to ones that they were more comfortable disclosing. The SEC scrutiny, the article suggests, "could have the unintended consequence of pushing companies to focus on short-term measures such as earnings or stock prices, which, critics say, can distort how companies are managed."

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