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Dow Jones Newswires, March 20, 2007 article


The Wall Street Journal  

March 19, 2007 2:14 p.m. EDT


SEC Adding Software To Help Evaluate Exec Pay, Perks

March 19, 2007 2:14 p.m.

   By Judith Burns 

WASHINGTON (Dow Jones)--The Securities and Exchange Commission will provide an easy way for investors to sift through data on executive compensation at hundreds of large U.S. companies, SEC Chairman Christopher Cox said Monday.

Cox reiterated the SEC's plans to "tag" executive compensation data for hundreds of U.S. firms, and make it available on the SEC's Web site. In addition, Cox announced that the SEC will add free software to its site that enables users to read the tagged data. "We're working on it and it should be up in June," Cox said at an SEC roundtable discussion on tagging data, a technology that makes it easier to find and compare financial results.

Richard Bennett, chief executive of The Corporate Library, which analyzes corporate information, speaking at the same event, said he's thrilled with the SEC's efforts to highlight corporate pay and perks. New SEC disclosure rules for executive compensation, which took effect starting this year, already are exposing perks such as aircraft and auto leases, security systems, financial advice and "gross-ups" given to executives to cover taxes owed on the perks, said Bennett. A new Corporate Library study found some firms spent up to 10 times more on perks in 2005, and Bennett said he thinks most were "newly reported" rather than "newly awarded."

SEC corporation finance division director John White said using software such as extensible business reporting language to tag financial data, including stock option grants, will help analysts, investors and regulators. Since data tagging simply converts information already provided into a more user-friendly format, it won't require separate scrutiny from company's outside auditors, even for companies that are newly embarking on data tagging, Cox stressed.

Altria Inc. (MO), Comcast Corp. (CMCSA), Dow Chemical Co. (DOW), Ford Motor Co. (F) and Ford Motor Credit Co., General Electric Co. (GE), Pfizer Inc. (PFE), South Financial Group Inc. (TSFG), and 3M Co. (MMM), are among a few dozen corporations already experimenting with using data tags for key financial data. Bennett said by taking part, companies show "they're investor-friendly" and "have nothing to hide," and expressed hope that tags will one day extend to non-financial data.

Mutual fund companies are gearing up for a similar test, which Vanguard Group Chairman and Chief Executive John Brennan predicted would benefit fund investors. He encouraged the SEC to consider other changes that would allow mutual funds to substitute short, online descriptions of funds for long, printed prospectuses, suggesting that could save mountains of paper and postage for firms such as Vanguard, which mails 20 million such documents a year.

-By Judith Burns, Dow Jones Newswires; 202-862-6692;

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