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Rules on pay disclosure may boost D&O exposures; Extra details could aid plaintiffs.(News)

Business Insurance, January, 2006

Byline: SALLY ROBERTS While new disclosure rules proposed by the U.S. Securities and Exchange Commission will provide more detailed information regarding executive compensation and the rationale behind it, they may also widen companies' exposure to shareholder lawsuits, experts say. The proposed rules, which the SEC plans to publish soon in the Federal Register for comment, would more clearly disclose the salary, stock grants and perquisites for publicly traded companies' highest-paid executives.

As the proposed rules now stand, companies would be required, among other things, to report a new total compensation figure for each executive; to put a dollar value on all stock-based awards, including stock options; and to itemize all perks worth $10,000 or...

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