2013 SEC comment letter trends: Employee stock compensation

December 2013
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2013 SEC comment letter trends: Employee stock compensation

At a glance

PwC has produced this document to assist management teams in identifying and understanding the SEC staff's current focus areas for stock compensation. We have highlighted the areas where registrants received the most comments from the SEC staff and have provided relevant examples of recent comment letters to aid preparers in ensuring their disclosures are robust and consistent with the relevant accounting or reporting guidance for stock compensation.

This publication includes an analysis of comments made by the SEC staff to registrants published on the SEC’s website between January 1, 2013 and September 15, 2013 related to stock based compensation.

There were 34 companies that received comments related to stock compensation during that period, and a total of 118 stock compensation comments. We have the following key observations regarding the comment letters to these companies:

  • 81% of the total number of comments received related to Management’s Discussion & Analysis of Financial Condition and Results of Operations in all the filings reviewed
  • 75% of the comments received related to S-1 filings
  • 50% of the comments received related to disclosure, 41% related to valuation and only 9% related to accounting recognition
  • 47% of the comments received related to companies in the technology industry and 32% related to the pharmaceutical and life science industry, with the remainder across a variety of sectors