Executive compensation has been a focus for the SEC in recent years, with new rules in areas such as clawbacks and insider trading. The agency has also turned its enforcement eye to companies’ disclosures around executive perquisites, or perks.
Our guest for this month’s episode of the Governance Matters podcast is Neil McCarthy, co-founder and chief product officer of DragonGC. He says there has been a particular enforcement focus on executives’ use of aircraft.
He also explains that there is a growing focus among companies on how to report – or not report – on personal security expenses for executives, a concern sparked in part by the murder last year of UnitedHealthcare CEO Brian Thompson.
‘I was at a conference recently and the tone around the table was [that] some companies might actually defy the SEC… on the disclosure angle, with the [Internal Revenue Service (IRS)] respecting the tax deductibility and not thinking of it as a personal expense,’ McCarthy says. ‘If you start putting disclosures into the proxy statement about the amounts that are being spent… you could tell who doesn't have security, who does, how much they're putting into it and all that.’
These are sensitive topics that boards need to handle with care amid attention not just from the SEC but also from the IRS and proxy advisers. In this episode, McCarthy discusses what scrutiny of perks will look like in 2025 – including with new SEC leadership – and some of the key issues governance professionals should be aware of.Â
The Governance Matters podcast provides listeners with insight into cutting-edge issues of the day for corporate secretaries, general counsel and other governance professionals. The series looks at how the roles of governance professionals and the board – as well as the landscape in which they operate – are evolving.
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Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
