The Senate Finance Committee holds a hearing today on Executive Compensation: Backdating to the Future/Oversight of Current Issues Regarding Executive Compensation Including Backdating of Stock Options; and Tax Treatment of Executive Compensation, Retirement and Benefits.  Here are the witnesses scheduled to testify:   

• Paul J. McNulty, Deputy Attorney General
• Mark Everson, Commissioner, Internal Revenue Service
• Linda Thomsen, Director, Division of Enforcement, United States Securities and Exchange Commission
• Nell Minow, Editor, The Corporate Library, Portland, ME
• Lucian A. Bebchuk, Harvard Law School
• Charles M. Elson, University of Delaware
• Steven Balsam, Temple University

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Background Relating To Executive Compensation (JCX-39-06):

This document, prepared by the staff of the Joint Committee on Taxation, provides a description of present-law tax rules and issues relating to certain types of executive compensation arrangements, including the $1 million dollar cap on the deduction for executive compensation, nonqualified deferred compensation, stock-based compensation (including the tax issues relating to backdating stock options), and golden parachute payments.   

 

The hearing and Blue Book come on the heels of an extensive bloogosphere discussion of stock option backdating:

• Stephen Bainbridge:  Backdated Options: Follow the Bouncing Ball (9/5/06)
• Matt Bodie:  Backdating: Yes, Virginia, Execs Do Want Inflated Pay (9/1/06)
• Matt Bodie:  Backdating:  A Further Response to Profs. Manne & Wright (9/3/06)
• Matt Bodie: Backdating: A Response to Prof. Ribstein (9/3/06)
• Vic Fleischer:  Options Backdating and Compliance Norms (Nawww, Honey, It Ain’t Armed Robbery if the Gun Ain’t Loaded) (9/3/06)
• Geoffrey Manne & Josh Wright:  No, Matt, Executive Compensation Is Not All About Norms (9/3/06)
• Larry Ribstein:  Bodie on Backdating (9/2/06)
• Larry Ribstein: Backdating Assumptions (9/4/06)
• Larry Ribstein:  The Market Yawns Over Backdating (9/5/06)

Press reports:

• Associated Press:  Congress Examining Stock Options Timing, by Marcy Gordon
• New York Times:  Report Estimates the Costs of a Stock Options Scandal, by Eric Dash
• Wall Street Journal:  Revisiting Executive-Pay Law Congress May Reduce, Reverse Deduction That Fed Stock-Option Explosion, by Charles Forelle & Kara Scannell