Employee stock compensation: 2014 SEC comment letter trends

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02/24/2015 by Human resource services
Employee stock compensation: 2014 SEC comment letter trends

At a glance

Disclosure, valuation, and accounting related to employee stock compensation are complex areas that continue to be a focus for the SEC staff. We have prepared this publication to assist management in identifying and understanding the SEC staff's current focus areas related to stock compensation.

Disclosure, valuation, and accounting related to employee stock compensation are complex areas that continue to be a focus for the SEC staff. We have prepared this publication to assist management in identifying and understanding the SEC staff's current focus areas related to stock compensation.

This publication includes an analysis of comments made by the SEC staff to registrants published on the SEC's website between September 15, 2013 and September 15, 2014 related to employee stock compensation. There were 223 comments related to stock compensation issued during that period, to a total of 101 companies.

We have the following key observations and trends regarding the comment letters to these companies:

  • 65% of the total number of comments received related to Management's Discussion & Analysis of Financial Condition and Results of Operations
  • 81% of the comments received related to S-1 filings
  • 52% of the comments received related to disclosure, 30% related to valuation, and only 18% related to accounting recognition
  • 47% of the comments received related to companies in the Pharmaceutical and Life Sciences industry and 11% related to the Technology industry

We hope you find this latest edition of our annual publication of SEC comment letter trends related to employee stock compensation to be a useful reference tool as you prepare your annual and quarterly reports and if you are in the process of preparing for an initial public offering.