SEC Issues Proposed Equity Compensation Plan Rules

The SEC is proposing regulations for public companies that would require at least annual disclosure about the total number of securities that have "been authorized for issuance under equity compensation plans in effect as of the end of the last completed fiscal year, whether or not the plans have been approved by security holders." The disclosure would be in a table in the company's proxy statement if there is a request for plan approval, and/or in the company's annual report of 10-K filing if no proxy statement is been filed.

The proposal would require identifying each equity compensation plan in effect as of the end of the last completed fiscal year. It would have to include:

• the number of securities authorized to be issued under the plan(s)
• the number issued pursuant to plans in the last year, whether directly or for the exercise of options, warrants, or other rights
• the number of securities to be issued if outstanding options, warrants and other rights are exercised
• the number of securities available for further issuance other than any include above.

This information would be provided whether the equity compensation plan was previously approved or not, but the disclosure would have to identify which plans were approved and which were not. Plans would also have to be briefly described. Comments on this proposed rule are being solicited. To see the entire proposal and to submit comments, go to the SEC's page on the topic.