As lawyers reviewing disclosure documents, it’s easy to gloss over the graphics when conducting a compliance review. But that would be a mistake. Those graphics are as important as any textual disclosure.

Let me give you an example. Quite a few companies include non-GAAP financial measures in proxy disclosure outside of the CD&A discussion of incentive targets and achievement that does not require Reg G compliance. On occasion, someone – after a compliance check is already conducted – decides to add in a non-GAAP metric to the discussion of company performance.

This might happen in the proxy summary, the letter to shareholders, or the discussion of shareholder engagement for the say-on-pay proposal, or even in the part of CD&A that discusses company performance more generally. Maybe it’s a reference in a graphic.

This new graphic is added in without alerting the compliance people that need to know; this happens without realizing that the graphic needs to follow the normal Reg G requirements. Bottom line: as compliance personnel, make sure you do a clean read of the final product, graphics and all.

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Photo of Danielle Benderly Danielle Benderly

Danielle Benderly provides in-depth counsel to public companies with respect to their corporate governance and securities regulation, SEC reporting and stock exchange (NYSE or Nasdaq) and SEC compliance needs, as well as insider trading issues under Section 16, Rule 144 and Rule 10b-5.

Danielle Benderly provides in-depth counsel to public companies with respect to their corporate governance and securities regulation, SEC reporting and stock exchange (NYSE or Nasdaq) and SEC compliance needs, as well as insider trading issues under Section 16, Rule 144 and Rule 10b-5. Danielle works with companies in various industries, including semiconductor, retail, software, technology, energy, manufacturing, transportation and biotech, ranging in size from small cap to Fortune 500 companies.

Danielle’s practice also focuses on providing in-depth counsel to public and emerging growth companies, as well as individual executives, with respect to stock options, restricted stock, restricted stock units (RSUs), employee stock purchase plans (ESPPs), and other stock-based executive compensation design and interpretation issues, including for public and private securities offerings, initial public offerings (IPOs), mergers and acquisitions (M&A) transactions and ongoing securities compliance and compensation disclosure obligations. Danielle is a frequent speaker and author on these issues, including the Executive Compensation Disclosure Handbook and many client updates.