There are plenty of new things to remember with the Dodd-Frank Act. But there were pretty far reaching changes to proxy statements last year as well. In particular, the director qualification disclosure required by Item 401(e) of Regulation S-K has drawn SEC comment. About all you can tell from the SEC comments we reviewed is the SEC wants specific, not general disclosures. A review of current disclosures indicates issuers often like to speak in generalities, leaving this as an open point between the SEC and the registrant community.
1. Hicks Acquisition Company II—September 20, 2010
SEC Comment: We note your response to comment 35 in our letter dated July 27, 2010 and the revised disclosure. Your revised disclosure, however, focuses on the “qualifications to serve on the board of directors” without also discussing why each director or director nominee was chosen to be on the board of directors. Therefore, please revise to briefly discuss the specific experience, qualifications, attributes or skills that led to the conclusion that the director or director nominee should serve as a director. Please see Item 401(e)(1) of Regulation S-K.
Issuer Response: The Company notes the Staff’s comment and has revised pages 79 and 81 of the Amendment to identify the experience, qualifications, attributes and skills that led the Company to conclude that each director or director nominee should serve as a director.
2. Primedia Inc.—-September 29, 2010
SEC Comment: We note your statement that the biography of each director contains information regarding the person’s knowledge, experience and skills that caused the board to determine that the person should serve as director. Please revise your disclosure to specifically discuss, in the biography of each director, the specific experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director for the company on an individual basis. Your current disclosure is too general. Refer to Item 401(e)(1) of Regulation S-K and Regulation S-K Compliance & Disclosure Interpretation 116.05.
Issuer Response: We would direct the Staff to the disclosure contained on page 15 of the Company’s 2010 Proxy Statement (under the heading “Stockholder Recommendations or Nominations for Director”) with respect to the specific experience, qualifications, attributes and skills that led to the conclusion that each of its director nominees should serve (and were qualified to serve pursuant to the Company’s Corporate Governance Guidelines) as directors of the Company. This information was placed in this section of our Proxy Statement (and not in the directors’ biographical section of the Proxy Statement) because it corresponds to the specific qualifications required of our directors pursuant to our Corporate Governance Guidelines. We believed placing this information in this location increased the overall readability of Proposal 1 and emphasized its relevance and importance as it related to compliance with our Corporate Governance Guidelines.
However, in future filings, beginning with its 2011 Proxy Statement, the Company will revise its disclosure to specifically discuss – in the biography of each director nominee – the specific experience, qualifications, attributes or skills that led to the conclusion that the nominee should serve as a director for the Company on an individual basis.
Using the disclosure contained in the Company’s 2010 Proxy Statement on pages 6-8 and page 15 as an example, the Company’s disclosure in future filings is expected to include text similar to the following under each individual director’s biography [Balance omitted]
3. SHG Services Inc.—August 24, 2010
SEC Comment: We note your disclosure that the key experience, qualifications and skills that are expected to be important for persons who will serve on Sabra’s board of directors are the same as those applicable to New Sun. Please revise your disclosure for each director and person nominated or chosen to become a director of Sabra, to briefly discuss the specific experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director for Sabra. Your reference to the disclosure for New Sun is not sufficient. Please see Item 401(e)(1) of Regulation S-K.
Issuer Response: The section titled “Management of Sabra—Directors” beginning on page 192 has been revised to provide the disclosure required by Item 401(e)(1) of Regulation S-K.
4. Terrex—August 10, 2010
SEC Comment: We note the disclosure regarding the qualifications of your directors to serve on your board on pages 4 through 7 of the section “Proposal 1: Election of Directors” of your proxy statement which has been incorporated by reference into your Form 10-K. It appears that you included only general disclosure in response to Item 401(e) of Regulation S-K. In future filings, please be more specific in describing the specific experience, qualifications, attributes or skills that led the Board to conclude that each director should serve on your board.
Issuer Response: While the Company believes its disclosure regarding the qualifications of its directors complies in all material respects with the disclosure requirements of Item 401(e) of Regulation S-K, it will review its disclosure regarding the qualifications of its directors in its future filings and consider adding more specific information in describing the experience, qualifications, attributes or skills that led the board of directors to conclude that each director should serve on the Company’s board.
Examples of Disclosure
1. Dell Inc.
Michael S. Dell. Director Qualifications
- Leadership Experience — Founder, Chairman and CEO of Dell
- Industry Experience — Knowledge of new and existing technologies, Dell’s industry and Dell’s customers
Sam Nunn Director Qualifications
- Leadership Experience — CEO of the Nuclear Threat Initiative; partner of King & Spalding; extensive experience as a director of global companies in technology, energy and consumer products
- Finance Experience — Served on the audit committees of Dell and Scientific Atlanta, Inc.
- Industry Experience — Experience as a director of global companies in technology, energy and consumer products
- Government Experience — United States Senator
2. International Business Machines Corporation (IBM)
W.J. McNerney, Jr.
- Global business experience as chairman, president and chief executive officer of The Boeing Company
- Manufacturing and technology experience as former chairman and chief executive officer of 3M Company and senior executive of General Electric Company
- Affiliation with leading business and public policy association (Business Roundtable)
- Outside board experience as a director of The Procter & Gamble Company
- Experience as a university trustee
- Global business experience as chairman, president and chief executive officer of IBM
- Affiliation with leading business and public policy associations (Business Roundtable and member of the Executive Committee of the Council on Competitiveness)
- Outside board experience as a director of Exxon Mobil Corporation
Susan L. Decker has been a director of Intel since 2006 and an Entrepreneur-in-Residence at Harvard Business School in Cambridge, Massachusetts, since 2009, where she is involved in case development activities, works with students, and helps develop and teach the Silicon Valley Immersion Program for Harvard Business School students. Ms. Decker served as President of Yahoo! Inc., a global Internet company in Sunnyvale, California, from 2007 to 2009; Executive Vice President of the Advertiser and Publisher Group of Yahoo! Inc. from 2006 to 2007; and Executive Vice President of Finance and Administration, and Chief Financial Officer (CFO) of Yahoo! Inc. from 2000 to 2007. Prior to joining Yahoo!, Ms. Decker was with the Donaldson, Lufkin & Jenrette investment banking firm for 14 years, most recently as the global director of equity research. Ms. Decker is also a member of Berkshire Hathaway Inc. and Costco Wholesale Corporation boards of directors and a member of those companies’ nominating and governance committees. Ms. Decker also served as a member of the board of directors of Pixar Animation Studios from 2004 to 2006.
Ms. Decker’s experience as president of a global Internet company provides expertise in corporate leadership, financial management, and Internet technology. In her role as a CFO, Ms. Decker was responsible for finance, human resources, legal, and investor relations functions, and she played a significant role in developing business strategy, which experience supports the Board’s efforts in overseeing and advising on strategy and financial matters. In addition, Ms. Decker’s 12 years as a financial analyst and having served on the Financial Accounting Standards Advisory Council for a four-year term from 2000 to 2004, enables her to offer valuable perspectives on Intel’s corporate planning, budgeting, and financial reporting. As a director for other multinational companies, Ms. Decker also provides cross-board experience.
John J. Donahoe has been a director of Intel since 2009 and President and CEO of eBay Inc., a global online marketplace in San Jose, California, since 2008. Mr. Donahoe joined eBay in 2005 as President of eBay Marketplaces, responsible for eBay’s global e-commerce businesses. In this role, he focused on expanding eBay’s core business, which accounts for a large percentage of the company’s revenue. Prior to joining eBay, Mr. Donahoe was the Worldwide Managing Director for Bain & Company, a worldwide management consulting firm based in Boston, Massachusetts, from 2000 to 2005, where he oversaw Bain’s 30 offices and 3,000 employees. In addition to serving on eBay Inc.’s board of directors, Mr. Donahoe is on the board of trustees of Dartmouth College.
Mr. Donahoe brings senior leadership, strategic, and marketing expertise to the Board from his current position as CEO of a major Internet company and his prior work as a management consultant and leader of a global business consulting firm. In his role at eBay, Mr. Donahoe oversaw a number of strategic acquisitions, bringing business development and M&A experience to the Board.
4. Berkshire Hathaway
The Governance, Compensation and Nominating Committee has established certain attributes that it seeks in identifying candidates for directors. In particular they look for individuals who have very high integrity, business savvy, an owner-oriented attitude and a deep genuine interest in Berkshire. These are the same attributes that Warren Buffett, Berkshire’s Chairman and CEO, believes to be essential if one is to be an effective member of the Board of Directors. In considering candidates for director, the Governance, Compensation and Nominating Committee considers the entirety of each candidate’s credentials in the context of these attributes. In the judgment of the Governance, Compensation and Nominating Committee as well as that of the Board as a whole, each of the candidates being nominated for director possesses such attributes . . .
WARREN E. BUFFETT, age 79, has been a director of the Corporation since 1965 and has been its Chairman and Chief Executive Officer since 1970. Mr. Buffett is a controlling person of the Corporation. He is also a director of The Washington Post Company and until February 2006, he was also a director of The Coca-Cola Company.
Albert A. Gore, Jr. has served as Chairman of Current TV since 2002, Chairman of Generation Investment Management since 2004 and a partner of Kleiner Perkins Caufield & Byers since 2007. Mr. Gore also is Chairman of the Alliance for Climate Protection.
Steven P. Jobs is one of the Company’s co-founders and currently serves as its Chief Executive Officer. Mr. Jobs also has been a director of The Walt Disney Company (“Disney”) since May 2006.
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