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Investor Relations Magazine, June 1, 2007 article


SEC doing its own tagging of exec comp data

June 1, 2007

Big surprise imminent for hundreds of companies: a pay analysis tool showing the power of XBRL

NEW YORK -- Hundreds of companies that haven't made the switch to filing results in XBRL will soon find out that the SEC has done it for them, at least for their executive compensation data.

Chairman Christopher Cox gave a preview of what was to come in his March speech at University of Southern California corporate governance summit when he said he 'plans to take executive compensation disclosure to a new level.' The project involves tagging data submitted this proxy season for a special 'executive compensation search page' on the SEC's own website.

SEC spokesman John Nester says there's no official date for the data to be available to the public, but it is 'very soon.' The number of companies covered will be 'more than 200 at first,' he adds.

The data will allow investors to make industry comparisons and analyses of particular types of compensation, such as stock options, using SEC-provided charting and graphing tools. The project is part of the SEC's commitment to transform its EDGAR database from a 'form-based electronic filing cabinet' to a real-time search tool with interactive capabilities using XBRL.

Gary Purnhagen, VP of strategic planning at Merrill Corporation, says focusing attention on executive compensation data, probably the most closely analyzed information in any SEC filing, is a 'brilliant' marketing tool to spur greater adoption of XBRL.

On Hitachi XBRL's blog, Bob Schneider, a partner in Nihon Equity Research, agreed, but says he worries a bit about CEOs seeing XBRL only as another tool 'to browbeat them' over how much money they make.

In an interview, Schneider, who researches Japanese stocks for institutional investors, says that's okay if it helps grow XBRL. 'It's enormously exciting to think that in terms of the documents, you won't have to re-key any of this stuff,' he says. 'You'll be able to manipulate the data so much easier. And what the easy transferability of data means worldwide, not just for analysts, but for internal reporting, for M&A and all sorts of other matters, is phenomenal.'

by Anna Snider


© copyright 2007 Cross Border Ltd




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