On Securities

onsecurities.com
On Securities

Author: Marty Rosenbaum, Maslon Edelman Borman & Brand
Topic area: Securities, governance, and executive compensation issues facing public companies
Blogging since: May 2009
onsecurities.com

Post excerpt from March 29, 2010: Regarding Joe Mauer’s 8-year, $184 million contract extension:

“What if Mauer were an executive at a public company? Based on new rules adopted by the SEC . . . the Twins (and their securities lawyers) would now have to deal with several newly required disclosures in the proxy statement for the team’s annual shareholders’ meeting. One new item requires public companies to discuss the risk aspects of their compensation policies and practices for employees, if these risks are reasonably likely to have a material adverse effect on the company. The proxy statement might include the following:

“(Hypothetical) Disclosure of Compensation-Related Risk: Mr. Mauer’s new compensation package . . . is reasonably likely to create a material risk for the company. The long-term and guaranteed nature of Mr. Mauer’s compensation eliminates meaningful performance-related compensation incentives . . . . However, the committee believes that risks resulting from elimination of monetary incentives are substantially offset by Mr. Mauer’s highly competitive personality and desire to bring a World Series Championship to his home state.”