January 3, 2007 -- So, it appears that the “New” SEC rules are now the “Old” SEC rule. On December 22nd the SEC decided to adopt some new rules that amend the recent changes. This new rule will require the Summary Compensation Table (SCT) to include equity awards based on the FAS123R value for the fiscal year, rather than the full grant date fair value as was the case in the original new rules. Some opponents of the change like Barney Frank (D. Mass) believe that this will diminish the size of the compensation reported, but for many of us, we believe that this actually lines up the compensation with what is actually earned in a fiscal year. Under the previous “new” rules, the aggregate full value of the grants may have significantly overstated the value of the equity compensation.

The Key Changes are as follows:

*Summary Compensation Table (SCT) –this will now be the grant date fair value (less forfeitures) and will be recognized ratably over the vesting period, as per FAS123R. The “old” way was to compute the aggregate grant date fair value.

*Grant of Plan Based Awards Table (GPBAT) – a new column (i) will be added to report the grant date fair value of the each individual equity award. This will also show the fair value of any repriced or materially modified options during the year.

*These changes will also be reflected in the Director Compensation Table (DCT) as well.

*Also, cash compensation that is foregone in return for stock or option awards will be reported in the appropriate salary or bonus column on the SCT.

What it means:

*Investors will have a more accurate picture of the compensation earned by an executive or director in a particular fiscal year;