The decision by the Securities and Exchange Commission in late December to amend how public companies report executive compensation continues to provoke a maelstrom of criticism by investors–despite the fact that more than a month has passed since the SEC announcement. In a Jan. 25 comment on the amended rules, the Council of Institutional Investors (CII)–an association of public, corporate and union pension funds representing more than $3 trillion in assets–writes to express its "disappointment" that CII's comments and the comments of other investors can have no impact on the amended rules applicable to the 2007 proxy disclosures since the amended rules became effective on Dec. 29, 2006. The new amended rules permit companies to report the compensation cost of stock and option awards over service periods rather than calculating and disclosing their full present value at grant date.

CII supported what the SEC had originally adopted in November, which required companies to report the aggregate value of equity awards at the grant date in the Summary Compensation Table. The new version permits companies to report compensation costs over the period of service. "We believe it is questionable whether the new requirements will make the Summary Compensation easier for companies to prepare and investors to understand," CII's General Counsel Jeff Mahoney wrote in the letter to the SEC.

And CII is not alone: The Teachers Insurance and Annuity Association of America and College Retirement Equity Fund (TIAA-CREF) and California State Teachers' Retirement System (CalSTRS) also prefer the earlier version because they feel that reporting the aggregate fair value offers a more accurate picture of the compensation committee's actions and intentions during the given reporting period. In its defense, the SEC claims that its new approach gives investors a better idea of the compensation earned by the executive during a particular reporting period as opposed to the awarded compensation.