As calendar year companies work on preparing their 2011 proxy statement materials, we wanted to report on a recent development that highlights the importance of a company's full disclosure of, and compliance with, the SEC's executive compensation disclosure rules.

By way of background, there were several additional executive compensation disclosure requirements added by the Dodd-Frank Act (see our July 16, 2010, July 26, 2010 and October 21, 2010 blogs), in addition to the amendments to the disclosure rules adopted by the SEC in December 2009 (see our December 18, 2009 blog), that will be in effect for the 2011 proxy season. Additionally, it appears that the SEC is likely to adopt final rules on Say-on-Pay on January 25, 2011. Therefore, as discussed below, failure to provide full disclosure may lead to negative consequences for both the company and its executives officers.