KMK Law Corporate & Securities Blog

It is important for companies to take into consideration the following when preparing annual reports and proxy statements in 2020:

Annual Reports:

• Management's Discussion and Analysis of Financial Position and Results of Operations: Exclusion of discussing the earliest of the three years of financial results if a discussion of that year is included in a prior SEC filing.
• Description of Properties: Disclosure only required about physical properties that are material to the company.
• Exhibits: Inclusion of a description of securities as an exhibit.
• Cover Page: Disclosure of national exchange or principal U.S. market for the company’s securities, the trading symbol and class of securities and elimination of the checkbox whether the company indicates that there is no disclosure of delinquent Section 16 filers.
• Inline XBRL: Cover page data must be tagged in Inline XBRL.
• Hyperlinks: EDGAR documents incorporated by reference must be hyperlinked, instead of being attached as exhibits.
• Risk Factors: Special consideration should be given to risk factors related to the following risks and quality of related disclosures:
  • Brexit
  • LIBOR
  • Cybersecurity
  • Sustainability

Proxy Statements:

• Hedging Disclosure: Disclosure of a company’s practices or policies that affect the ability of a company’s employees or directors to engage in hedging transactions or of the fact that the company does not have any such practices or policies in place.
• Pay Ratio Median Employee Determination: Determination of whether the median employee has changed for purposes of determining the pay ratio calculation or disclosure that the same median employee as the previous year is being used and the basis upon which the company has determined that such use will not significantly affect its pay ratio disclosure.
• Board Diversity: Disclosure of the diversity characteristics considered by the board or nominating committee in evaluating board nominees.
• Environmental, Social and Governance (ESG) Issues: Determination of whether voluntary disclosure of ESG issues is necessary.