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Remember when you were a kid and you didn’t clean up your room or do something else you were supposed to do, and a parent would say “How many times do I have to tell you…?”  Well, the same holds true for perquisites disclosure.

Not quite four months ago, I wrote about an SEC enforcement action involving perquisites and the importance of paying close attention to perks.  Well, the SEC has done it again.  Two enforcement actions in four months may not a trend make, but as we approach the end of the calendar year – and the onset of the 2021 proxy season – a reminder seems in order.

The recent enforcement action, concluded at the end of September, sounds similar to so many other sagas of nondisclosure of perks.  In this case, the company disclosed “All Other Compensation” just shy of $600,000 over a four-year period.  The compensation included “certain personal travel and lodging costs.”  However, according to the SEC, the company failed to disclose $1.7 million of “travel-related perquisites and personal benefits,” consisting of personal use of corporate aircraft, expenses associated with hotel stays, and taxes related to both items.  It seems hard to overlook $1.7 million, but it’s not the first time it’s happened, and it almost surely will not be the last.

The company agreed to “cease and desist from committing or causing any violations and any future violations” of specified Exchange Act sections and related rules, and to pay a penalty of $600,000.  And the SEC’s order makes it clear that penalty would have been higher but for the company’s cooperation in the investigation.

My previous post (and an earlier one) discuss some practical approaches to perquisites disclosure that I won’t repeat here.  However, at a minimum, as we get closer to year-end and another proxy season, it’s incumbent upon companies to take steps designed to ensure that all perquisites are properly disclosed.  Two enforcement actions in four months may not a trend make, but a third may be viewed differently.

As your parent probably said when you didn’t complete that task: Don’t make me have to remind you again.