1. The SEC’s Division of Economic and Risk Analysis issued analysis, here, on the “[p]otential effect on pay ratio disclosure of exclusion of different percentages of employees at a range of thresholds.” Without even trying to follow the statistical analysis or math, we’re confident the conclusion is if you exclude people, the ratio may be off; if you exclude a lot of people, the ratio may be more off. (If we got that wrong, please don’t comment. We don’t really care that much.) Alas, your opportunity to comment to the SEC expired last week. The release of additional analysis and the short comment period might suggest that the SEC is trying to bolster the analysis to support its company-favorable statistical sampling approach to calculating the median employee’s pay and that it will soon adopt its pay ratio rules , proposed here. And presumably, rule adoption will address Senator Warren’s first and perhaps most passionately held critique of SEC Chair White, here. (Oh, Senator.)  
  2. As if the SEC didn’t have enough problems with intermeddlers from the Commonwealth of Massachusetts, we note that the Secretary of the Commonwealth sued the SEC, see here, to enjoin the portion of its Regulation A+ rules that preempt state law , arguing that preemption was not intended by Congress. Lack of preemption would, of course, make this exemption much more useless. (And c’mon, Massachusetts, we get the historical context, but after 227 years “Commonwealth” just sounds vaguely elitist.) In the meantime, the SEC has updated its EDGAR filing manual to accommodate the new Regulation A+ rules, here.   
  3. Last month we apologized for tipping you to the fact that forms BE-10 are required for most U.S. companies with foreign operations . (Again, sorry.) The Bureau of Economic Analysis, no doubt tipped that no one knew about the requirement until reading our alert, has extended the filing deadline for new filers until June 30. See the bright red letters on its website here. You’re welcome.
  4. A proxy season half-time report from Veritas Executive Compensation Consulting is here. Not surprisingly, it identifies proxy access as the highest profile shareholder proposal, identifying 84 proposals on the ballot as of the end of May. Commentary abounds, but our own summary of results to date for the 75 companies targeted by the New York City Comptroller, whose proposals follow the SEC’s preferred 3%, three-year, 25% of the board formulation, is here. Two companies, Staples and Whiting Petroleum, agreed to support a proxy access proposal at their 2016 meetings and the Comptroller withdrew its proposal. Of the remaining 73 company proposals, as of yesterday, voting results for 54 (74%) had been reported of which 33 (61%) were approved and 21 (39%) were not. Only six of the 54 companies included management counterproposals. Three of these were approved and three failed.   
  5. CERES and BlackRock released a report on investor strategies for incorporating ESG (that’s environmental, social and governance) considerations into corporate interactionshere.   
  6. The SEC proposed rules to modernize the reporting and disclosure of information by registered investment companies and investment advisers here, including that investment companies publish new monthly reports about portfolio holdings and annual information on an updated form, and that investment advisers report information about their risk profiles. The companion release proposing updates to Form ADV is here.   
  7. Finally, several sources cite The Wall Street Journal’s report that the SEC’s will propose clawback rules “soon,” including the source here. That could be less about inside information and more about the WSJ guessing that, because clawbacks are the only significant governance provision in Dodd-Frank yet to be adopted, they’ve just got to be coming soon. In any case, we know what you’re thinking: Why are you telling us about pending rules we’ve known are coming without providing any actual new information? Well, because seven items just seemed like the right number to include in this month’s alert.