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06/24/2015

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"You should take the time to provide comments to whatever body is requesting them..."

Can you elucidate instances in which regulatory agencies changed proposed regulations in response to comments? I'm not trolling, I genuinely want to know if this is anything other than a completely pro-forma exercise.

Great question Tony,

I think the recent delayed and measured roll-out of the CEO Pay Ratio rules were directly impacted by comments. But a more specific example in which I was directly involved was the IRS proposal to tax shares from ISO and ESPP plans at the time of disposition (along with withholding by the company). This was after the dotcom crash.

Comments from companies and providers slowed the process and gave us time to go to Washington DC and speak directly with the Treasury Department. Once we explain that 1) what they wanted to do was nearly impossible from and administrative perspective and, 2) would not generate anywhere close to the revenue they had projected (since they had made the projections based on the peak of the dotcom boom), they backed off and the new rule died.

FAS123 was kept from being a reality in 1993 and beyond because of comments (very vocal) from the tech industry. It took a lot for it to become a footnote disclosure and more than a decade for it to become the standard methodology for share-based accounting.

I am sure that others can list other examples.

The goal is often to simply slow down the process and ensure that everything is fully considered. The rule yojur are commenting on will probably still happen, but perhaps it will be better.

Thank you Dan.

I'm naturally inclined to cynicism about this sort of thing, so it's good to have a different perspective.

With that said, apparently all we're doing is ceding ground at a slower rate.

Tony,

I think change in the executive compensation space is inevitable. There have been too many times where pay has not matched expectations or results for it not to be a concern to many.

Our real goal has to be ensuring that changes happens in a reasonable and executable fashion. Without input from those closest to it, we are guaranteed to get something that no one likes.

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