Executive pays will be subject to stricter SEC rules

According to Reuters, U.S. securities regulators are considering changing how companies are required to disclose stock options awarded to executives. At a Securities and Exchange Commission meeting on Wednesday, the commissioners also should propose giving investors a greater voice in setting executive pay at companies that were given taxpayer funds under the U.S. government's Troubled Asset Relief Program.

Among the possible changes is a revision to how companies value equity awards in the "summary compensation table" for top executives that they file with the commission each year. The SEC is considering requiring companies to include the estimated value for stock options granted during the year.

The Obama administration has impelled Congress to give the SEC authority to require publicly traded companies to give shareholders a nonbinding vote on pay for top executives. It also wants the SEC to have power to insure that corporate pay committees are sufficiently independent from management.

There could be another requirement that companies disclose more information about compensation consultants who also perform other work for the company. The SEC may also expand the so-called compensation, discussion and analysis (CD&A) section of the proxy statement, to require companies to address how they set compensation for regular employees, as well as top executives.

Besides, the regulator is considering further disclosures about the experience and qualification of director candidates, as well as why a company adopts a particular leadership structure, such as separating the chairman and CEO roles. In addition, it may also consider requiring companies to expand discussion of material risks to its business.