“Rep. Frank Fired Up Over SEC Pay Reg” (Dec. 28) incorrectly states that companies will be permitted to “conceal part of the options perks paid to CEOs.” The truth is exactly the opposite.

Our latest action did not even concern whether stock-option grants will be fully disclosed each year. They will be, of course, in their entirety and in rich detail. The requirement is going into effect for the first time in 2007, thanks to the SEC’s new executive-compensation rule.

Rather, our recent action affects an additional disclosure item, in the same document, of a single number representing last year’s pay – salary, benefits, options and perks.

To capture the options component of this number, the commission unanimously determined to follow the relevant accounting standard for consistency and clarity.

Because the single figure represents last year’s pay, not all of the potential value of options that may vest in the future is included.
Christopher Cox
Chairman
Securities and Exchange Commission
Washington, D.C.