FEES PAID TO COMPENSATION CONSULTANTS
In response to a perception in the marketplace that compensation consultants who perform other services for a corporation may not be sufficiently independent, the SEC has created the following rules for disclosure of fees paid to the consultants.
1. If the board hires its own consultant and the consultant does no other work for the company, no fee disclosure is necessary - either for fees paid to the board’s consultant or to any other compensation consultants used by the company.
2. If the board hires its own consultant and the consultant performs non-executive compensation services for the company in excess of $120,000 per year, fee disclosure is necessary - both for the other work and the work done for the board.
3. If the company hires a consultant and the consultant does work for the board and performs non-executive compensation services for the company in excess of $120,000 per year, fee disclosure is necessary - both for the other work and the work done for the board.
4. Services performed by the consultant that are not related to executive compensation (for example, services involving broad-based compensation programs or certain types of surveys), do not require fee disclosure.