SEC wants more details on pay for executives

WASHINGTON — Regulators are moving to require companies to disclose more details of executives’ pay and perks. They’re also writing new rules on disclosure of the dating of stock options as controversy widens over suspect timing.

The Securities and Exchange Commission is voting at a public meeting today to adopt the biggest changes in rules governing disclosure of executive compensation since 1992. Public companies for the first time will be required to furnish tables in annual filings showing the total yearly compensation for their chief executive officers, chief financial officers and the next three highest-paid executives.

The plan, designed to enhance corporate transparency and address an issue that has angered company shareholders and the public, comes as the controversy builds over timing of options grants. In expanding probes, at least 60 public companies have disclosed that their options practices are being investigated by the SEC or the Justice Department or both, and the SEC itself says it has at least 80 companies under scrutiny.

At issue in many of the investigations is a practice known as backdating, in which stock options are retroactively issued to coincide with low points in a company’s share price — a move that can fatten profits for recipients of the options when they eventually sell their shares after the market price rises.

Backdating of options can be legal so long as the practice is properly disclosed to shareholders and approved by the company’s board, experts say.