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SEC Moves Performance
Graph to More Prominent Position in 10-K/Annual Report to Shareholders
On Wednesday, September
8, 2006, the SEC issued a
formal Proposed Rules release
stating that the
Performance Graph will be retained as a reporting requirement for
publicly traded companies, and moved to a more prominent position for
shareholder access:
New Item 201(e) -- Market Price of and
Dividends on the Registrant’s Common Equity and Related Stockholder
Matters -- in the Annual Report to Securities Holders / 10-K.
Summary:
Effective
Date: Effective for all companies whose Fiscal Year End falls
after December 15, 2006
Old
Location: Item 402(l), typically in the DEF 14-A
New Location: Item
201(e) -- Market Price of and Dividends on the Registrant’s Common
Equity and Related Stockholder Matters -- typically in the Annual Report
to Securities Holders / 10-K.
Changes in Calculation
Methodology: None -- still requires Total Return, including
reinvestment of all dividends, (adjustments for all splits, weighting
according to market capitalization for peer groups/custom indexes,
listing of companies in peer groups, transition-year policies etc.), for
company, Major Market Index, Line of Industry Index or Peer Group.
* The RDG
Compliance Newsletter will demonstrate the proper placement of both the
current requirement and new requirement in order to make this process as
easy as possible.
**Examples will be available at
www.researchdatagroup.com beginning October 2,
2006.
This marks an important change in the positioning of the Performance
Graph, and demonstrates the need for this information to be prominently
displayed to shareholders in the Annual Report. This change will
be required
of all companies whose Fiscal Year End comes after
December 15, 2006.
Support for the changes in the Performance Graph came from a broad and
influential base including: Financial Analysts, Money-Management Firms,
Retirement Funds, Law Firms, Corporate Communications Experts and most
importantly, countless shareholders all across the country who value the
company provided standardized access to licensed, accurate Total
Return Performance Data.
The
SEC's Final Rules Proposal addressed the relocation of the Performance
Graph:
"Many commenters objected to eliminating the
Performance Graph, stating that it provides an easily accessible visual
comparison of a company’s
performance relative to its peers and the market, and provides a
standardized source for this
type of information.
In light of the significance
of this disclosure to a broad
spectrum of commenters, we have decided to retain the Performance Graph
in the amendments we adopt
today...
Accordingly, we
have decided to retain the requirements for the Performance Graph, but
have moved them to the disclosure item entitled “Market Price of and
Dividends on the Registrant’s Common Equity and Related Stockholder
Matters...
The Performance
Graph will be required only in the company’s annual report to security
holders that accompanies or precedes a Total Return or information
statement relating to an annual meeting of security holders at which
directors are to be elected (or special meeting or written consents in
lieu of such meeting)..."
The
Performance Graph will be retained, but no longer coupled with executive
compensation disclosure. The requirement for the Performance Graph will
be moved to the disclosure rule covering the market price of common
equity and related matters, and the Performance Graph will be required
in annual reports to security holders that accompany or precede Total
Return statements relating to annual meetings at which directors are to
be elected.
New Item 201(e) of Regulation S-K [17 CFR
229.201(e)] will require the Performance Graph.
Current Requirements for filing:
-
If your company has
300 shareholders, $10 Million in Assets and a listed class of stock
on any public exchange in the U.S.: NYSE, NASDAQ, AMEX, TSX,
OTC, PINK SHEETS
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Company Market
Capitalization over $25 Million, or revenue over $25 Million
About RDG:
-
Research Data
Group, Inc., is the leader in Total Return, Performance Graph, Peer
Group Comparison and report production, and is committed to keeping
the corporate world informed and up to date with the latest in SEC
regulations.
-
Research Data
Group, Inc. is the largest and only firm that specializes in
providing Total Return Graphs
-
RDG is the
preferred provider of Dow Jones Total Return Data, a licensed vendor
of S&P Total Return Data, and offers all other Major Markets,
as well as an array of published Industry Indices.
-
We guarantee your
chart will be filed correctly as we provide charts for over 1500
public companies, and have a knowledgeable staff ready Monday
through Friday to answer any of your questions.
Please feel free to contact one of our Executive
Consultants with any questions:
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