Month: June 2003

“New Rules Require Shareholder Approval of Equity Compensation“: That’s the announcement of the Securities and Exchange Commission today which approved new rules proposed and adopted by the New York Stock Exchange and the Nasdaq Stock Market requiring shareholder approval of equity compensation plans, including stock option plans. The new rules will also require approval for repricings and material plan changes. Securities and Exchange Commission Chairman William H. Donaldson provided these comments today:

These rule changes are an important step by our nation’s principal markets. They have responded to the Commission’s call for an increased shareholder voice in the equity compensation practices of listed companies and I applaud them. These changes are part of a broad movement by our markets and the Commission to enhance the corporate governance practices of the companies traded on them. The New York Stock Exchange and the Nasdaq Stock Market have proposed additional listing standards to strengthen corporate governance, and the Commission looks forward to working with them to complete these efforts on behalf of investors and shareholders.

You can access the new rules here.

CorpLawBlog provides this discussion.

Gardner, Carton & Douglas provides this great article by Lisa Collins and Timothy Stanton: “All of a Sudden, a COBRA Deadlines Looms: New DOL rules will likely prompt widespread revisions of notices, provisions–soon.” (I love this article because the information in it is so practical and helpful to practitioners. Thanks to Gardner, Carton & Douglas for sharing their analysis with the rest of the world.)

The IRS recently issued Revenue Ruling 2003-83 which provides guidance on reasonable funding methods for pension plans. (Also, via Benefitslink here.)

Reuters via Lycos reports: “GM Opposes Pension Disclosure Changes.” The article quotes GM spokeswoman Toni Simonetti as saying: “The proposed new rule assumes you have one defined benefit plan. If you’re a multinational and you have several plans, it’s virtually impossible to comply with the (new) rule.”

Scott Burns reports here for the Houston Chronicle: “Bush tax cuts similar to printing more money.”

This article–“Enron pushing for inexpensive mediation decision”–by Mary Flood and Eric Berger for the Houston Chronicle reports on the mediation efforts going on in the Enron bankruptcy and civil litigation cases today.

“Exec Stock Options: Put ‘Em to a Vote: SEC will require companies to get shareholder approval for stock-option grants. Elsewhere: . . FASB wants quarterly DB reports”: David M. Katz for CFO.com reports here. The article discusses how the Securities and Exchange Commission is expected to adopt a rule today requiring all companies whose shares are traded on U.S. stock exchanges to obtain shareholders’ approval for executive stock compensation packages.

Kara Scannell for today’s edition of the Wall Street Journal provides this: “Revenues at Law Firms Rise 8.5%, Aided by Diversification and Cuts.” The article reports on the American Lawyer magazine‘s annual survey which found that “gross revenues at the 100 biggest law firms rose 8.5% to $38 billion in 2002, helped by diversified-practice groups, cost cutting and higher billing rates.” Does anyone else find it disturbing that when economic times are tough, law firms raise their billing rates? . . .

Today’s Federal Register is here.

“Fed explains tricky rules on reporting pension plan health”: Pacific Business News has this regarding a report issued by Simon Kwan for The Federal Reserve Bank of San Francisco this week explaining “how current accounting practices for corporate pension funds blur reality.”

Another very interesting article by Richard Bernstein for the New York Times on how demographics is making pensions an “urgent political issue” in Europe: “Aging Europe Finds Its Pension Is Running Out.” The article discusses how in Europe the population is both living longer and producing fewer children which is beginning to change some of the fundamentals of both social and political life. The article discusses a study by William Frey, a demographer at the Brookings Institution in Washington, which predicts that the median age in the United States in 2050 will be 35.4, only a very slight increase from what it is now. In Europe, by contrast, it is expected to rise to 52.3 from 37.7. The article states: “The likely meaning of this “stunning difference,” as the British weekly The Economist called the growing demographic disparity between Europe and the United States, is that American power–economic and military–will continue to grow relative to Europe’s, which will also decline in comparison with other parts of the world like China, India and Latin America.”

Kris Frieswick for CFO.com reports: “Age Discrimination Snags Lurking in Pension Rules: New federal pension rules are drawing fire from both sides of the cash-balance plan debate.”

This report by Jonathan Weil for the Wall Street Journal: “More frequent disclosures on the way for US pension plans.” The article reports on FASB’s decision last week to require US companies to disclose the impact, in dollar amounts, that the various parts of their pension plans have on each quarter’s earnings. The article states that ”[r]eaders of a public company’s financial statements would also be able to see for the first time the degree to which various line items on a company’s income statement were boosted or dragged down by pension-plan activities.”

Today’s Federal Register is here.

“Fed explains tricky rules on reporting pension plan health”: Pacific Business News has this regarding a report issued by Simon Kwan for The Federal Reserve Bank of San Francisco this week explaining “how current accounting practices for corporate pension funds blur reality.”

Another very interesting article by Richard Bernstein for the New York Times on how demographics is making pensions an “urgent political issue” in Europe: “Aging Europe Finds Its Pension Is Running Out.” The article discusses how in Europe the population is both living longer and producing fewer children which is beginning to change some of the fundamentals of both social and political life. The article discusses a study by William Frey, a demographer at the Brookings Institution in Washington, which predicts that the median age in the United States in 2050 will be 35.4, only a very slight increase from what it is now. In Europe, by contrast, it is expected to rise to 52.3 from 37.7. The article states: “The likely meaning of this “stunning difference,” as the British weekly The Economist called the growing demographic disparity between Europe and the United States, is that American power — economic and military — will continue to grow relative to Europe’s, which will also decline in comparison with other parts of the world like China, India and Latin America.”

Kris Frieswick for CFO.com reports: “Age Discrimination Snags Lurking in Pension Rules: New federal pension rules are drawing fire from both sides of the cash-balance plan debate.

This report by Jonathan Weil for the Wall Street Journal: “More frequent disclosures on the way for US pension plans.” The article reports on FASB’s decision last week to require US companies to disclose the impact, in dollar amounts, that the various parts of their pension plans have on each quarter’s earnings. The article states that ”[r]eaders of a public company’s financial statements would also be able to see for the first time the degree to which various line items on a company’s income statement were boosted or dragged down by pension-plan activities.”