Do Insiders Comply with Disclosure Rules? Evidence from Canada, 1996-2011
Notice bibliographique
Résumé
The disclosure of information on the granting of stock options as part of senior managers’ compensation packages can be a cumbersome and patchy process in terms of both regulatory compliance and public accessibility. Closing the gaps to make the reporting and accessing of data less unwieldy and more timely, efficient and accurate, should be a priority for securities regulators Firms are required to disclose the issuing of stock options to their highestlevel executives in their annual information circulars. Slight additions made to the information provided in the circulars, such as stock option grant dates, would greatly improve corporate transparency. Insiders also need to be educated on their duty to file, as they bear a fair amount of the responsibility for the problems in the system. Insiders’ lack of awareness about compliance contributes to discrepancies between insider disclosure and company disclosure, and creates information gaps. Misfiling, failure to file, and late filing of data — which can be a chronic problem — further hamper the disclosure process. Add to this the issue of limited accessibility created by a frustrating lack of linkage between databases and a paucity of online searchability capacity. This paper’s research shows that compliance levels are quite high in regards to reporting of information in proxy circulars. However, 12 per cent of stock option awards are not made public outside of the circulars, with 10 per cent of awards to CEOs, nine per cent to CFOs and 15 per cent to VPs going unfiled. The incidence of unfiled reports also includes 22 per cent of insiders for whom stock options are the only award. Equally worrisome is the fact that 26 per cent of insiders have at least one option award that goes unreported and nearly eight per cent of insiders never file. Some 34 per cent of insider awards are filed with information that differs from the data reported in the firm’s information circular. Confusion and procedural ignorance about compliance on the part of insiders contribute to such discrepancies. The System for Electronic Document Analysis and Retrieval (SEDAR), the continuous disclosure database that firms use, cries out for modernization. Not only does its archaic reporting system limit its accessibility, but it functions separately from the database insiders use, the System for Electronic Disclosure by Insiders (SEDI). Linking the two databases would streamline insider filing requirements, increase compliance with insider disclosure, and improve the audit and compliance function of the securities regulators. The financial penalties for non-compliance or irregularities should be an incentive for both insiders and issuers to educate themselves and ensure they are meticulous in producing error-free, timely data and in making those data public. Unfortunately, enforcement is inconsistent. Currently, penalties tend to be applied only if another serious regulatory breach accompanies the misfilings, late filings or chronic nonfilings. Canada’s disclosure system needs fixing and streamlining in order to achieve the highest level of transparency on executive compensation. Some of these fixes are simple, others may be costly, but if improvements are not made, the system’s integrity, along with shareholder and public confidence, risk being seriously compromised.
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Comment cette classification a été obtenuedéplier
Prédiction machine sur la base complète
Imitation des enseignantsNi prévalence calibrée, ni vérité terrain. Validation humaine à venir. Le volet Gemma est une étiquette directe du modèle pour chaque travail de la base, lue sur la notice réduite au titre. Le volet Codex est un classifieur appris des 10 348 étiquettes directes de Codex et calibré sur les taux pondérés de l'échantillon; les champs sans appui suffisant ne portent aucun appel Codex. Le mode candidate est l'union des deux volets; le consensus est leur intersection. Ces sorties portent le statut machine_predicted_unvalidated et ne sont pas des étiquettes humaines.
Scores du classifieur distillé par catégorie (deux têtes)
| Catégorie | Codex | Gemma |
|---|---|---|
| Métarecherche | 0,006 | 0,035 |
| Méta-épidémiologie (sens strict) | 0,000 | 0,001 |
| Méta-épidémiologie (sens large) | 0,001 | 0,001 |
| Bibliométrie | 0,004 | 0,015 |
| Études des sciences et des technologies | 0,006 | 0,003 |
| Communication savante | 0,005 | 0,002 |
| Science ouverte | 0,003 | 0,002 |
| Intégrité de la recherche | 0,001 | 0,002 |
| Charge utile insuffisante (le modèle a refusé de juger) | 0,007 | 0,001 |
Scores machine (provisoires)
Les deux têtes enseignantes du modèle étudiant, lues sur ce travail. Un score ordonne la base pour la relecture; il n'affirme jamais une catégorie, et le statut de validation accompagne chaque rangée tel quel.
Scores de référence d'un modèle non mature (critères de maturité non atteints, 7 itérations). Un score ordonne; il n'affirme jamais une catégorie.
score_only:v0-immature-baseline · tel quel depuis la passe de notation : score_only signifie que le nombre peut ordonner les travaux, et qu'aucune étiquette de catégorie n'en découleClassification
machine, non validéePrédiction automatique; un appel candidat d’une seule source (Gemma direct ou Codex distillé), pas un consensus.
Le détail, modèle par modèle et score par score, se trouve en fin de page sous « Comment cette classification a été obtenue ».