New interps under Item 404, related-person transactions
By Cydney Posner
The SEC has also just added a couple of new interps regarding Reg S-K, Item 404, Related-Person Transactions:
Item 404(a) —Transactions with related persons
- When the transaction under consideration is an employment arrangement, "the amount involved in the transaction" includes all compensation, not just the salary of the employee.
- Although disclosure of compensation paid to an executive officer (who is not an NEO) that has been approved by the compensation committee may be omitted under Item 404(a) pursuant to Instruction 5.a (which permits exclusion of compensation paid to executive officers under certain circumstances), compensation paid to an employee--immediate family member of this executive officer should be disclosed under Item 404(a) if the employee was not an executive officer.