News digest for July 26, 2006

SEC orders more exec pay disclosure
Tables on executive compensation now scattered throughout corporate proxy statements and financial reports will have to be consolidated and simplified under the new rules. Companies will also be required to explain in narrative form their executive pay programs in a new statement to be called “Compensation Discussion and Analysis,” or CD&A.

SEC Expands Pay Rules to Crack Down on Options Abuses
The agency, as part of the biggest overhaul of executive-pay rules in 14 years, will force companies to provide more details on the timing and pricing of option grants.

Will threat of disclosure keep lid on exec pay?
Investors may be in for some big surprises. This year, Pfizer provided a taste of what’s to come, disclosing that Chief Executive Hank McKinnell will receive a retirement package worth more than $83 million total, or $6.5 million a year. Next year, every company will be forced to disclose such compensation.

SEC chairman says he’ll push for new rules for hedge funds
With fraud among hedge funds on the rise and ordinary investors getting hurt, the chairman of the Securities and Exchange Commission said Tuesday he will push for new emergency regulations of the high-risk investment pools.

Shareholder voting disclosure varies across Europe
Manifest has released its first pan-European survey of shareholder voting trends covering the national blue-chip indices in Belgium, France, Germany, Ireland, Italy, the Netherlands, Spain, Sweden and Switzerland as well as the UK indices.

Survey Examines Nomenclature and Numbers Fueling SRI and Extra-Financial Research
“The ‘industry’ needs to get rid of the term ‘extra-financial,” because this is exactly what SRI analysts are trying to prove: that environmental/social/ethical issues are, after all, ‘financial’ as well,” stated one buy-side respondent, framing the problem succinctly.

Academic Study: Is It Possible to Restore Trust?
“Managers working to rebuild trust should be sure that people observe their trustworthy behavior,” the researchers write. “Taken together, we find that when it comes to trust, actions matter, but they do not always speak louder than words.”

NIRI’s Thompson Joins PR Newswire’s Disclosure Advisory Board
As part of the Disclosure Advisory Board, Mr. Thompson will join a decorated group of corporate, regulatory and investor community leaders to debate current disclosure and governance issues. The outcome of those debates, and overall goal of the Disclosure Advisory Board, will be to advance the quality and usefulness of disclosure, while anticipating the trends that will shape the way public companies communicate around the world.

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