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SEC wants detailed but simple pay analyses

WASHINGTON - Federal regulators are telling companies to provide clearer, more detailed analyses of their executive compensation decisions and to avoid repeating unhelpful "boilerplate" in expanded disclosure statements.

After reviewing 350 public companies' compliance with new disclosure rules, the Securities and Exchange Commission said yesterday it asked "a significant number of companies to replace boilerplate discussions . . . with more specific analysis" of how compensation committees determined executive pay and perks.

While acknowledging the new disclosure rules have provided investors with a substantial amount of information on executive pay, "far too often meaningful analysis is missing," John White, the director of the SEC's division of corporate finance, said during a speech yesterday in San Francisco at the National Association of Stock Plan Professionals annual conference on executive compensation.

The SEC had the most questions on "performance targets" for individuals that companies used to determine compensation and asked them to explain how the quality of an executive's performance translates into an objective pay decision.

Corporate performance goals included in the proxies ranged from financial targets such as earnings and sales growth, to strategic goals including increases in market share, according to the review.

The SEC this year began faxing requests for more detailed information to hundreds of companies, including General Electric Co., Schering-Plough Corp., and Prudential Financial Inc.

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