May 31, 2025
Dear Chairman Atkins and SEC Staff: I write today for my comments/questions to become part of the record of the above-referenced roundtable concerning executive compensation disclosure requirements. As it now stands, I will be on an airplane June 26 returning to the USA and cannot attend the actual roundtable. In no particular order, can the SEC address the unfortunate situation where an officer [such as a CEO] of a company is faced with draconian threat of disgorgement of 100% of his/her salary in an SEC civil action based on incorrect disclosures to investors in a PPM or a Form D where it states that no compensation has yet been paid to officers or the like. When the PPM or the Form D says that or something similar, it exposes the CEO to defend against full, 100% claw-back via disgorgement of his reasonable executive compensation and renders his/her service to the corporation retroactively gratuitous as the SEC takes the position that he/she shall disgorge the entirety of the salary paid. Notwithstanding the Liu SCOTUS opinion that requires the SEC to employ general equitable principles, requires the SEC to separate improper gains from proper ones, and generally was expected to avoid future situations where an officer taking his/her salary would see 100% of it subject to disgorgement. To paraphrase, the corporate officer in that situation is retroactively rendered an involuntary servant [i.e. a chattel slave] to the company when the SEC swoops in and seeks disgorgement of every penny of past salary to that CEO...it can amount to hundreds of thousands of dollars or more and it may only be based on a boilerplate disclosure that was erroneously made or erroneously not brought up to date. Should not the SEC in such situations issue guidance in the form of a policy statement or other pamphlet for its employees to use in the field that would avoid draconian full forfeiture as the SEC is now seeking in at least one pending securities fraud civil action [U.S. Dist Ct. D. Nevada] and instead apply the letter and spirit of Liu and its progeny to weigh what portion [if any] of such officer's salary is properly and equitable subject to disgorgement and what portions of that already-paid salary was earned righteously and thus protected from claw-back/disgorgement? Should the subsequent hard work and diligent efforts of a company CEO that clearly benefits a company be rendered foul and tainted and seen as "ill-gotten" in full because there was a disclosure issue or some other type of inconsistency afoot as to executive compensation? Isn't it time the SEC trial attorneys embraced the Liu holding and ceased asking trial courts to engage in draconian disgorgement of ALL of an executive's previously paid salary where it can be shown that the executive rendered good services for salary paid and that the salary was reasonable in all other respects aside from the disclosure issue[s] that may exist? Shouldn't the company pay its officers for the work of those officers that promote, improve and benefit the company as opposed to reaping an unfair windfall via SEC-brokered disgorgement? Thank you for including these comments/questions in your materials. Jeffrey Wertz ESQ Pittsburgh, PA Admitted: U.S. Court of International Trade, U.S. Court of Appeals for the Federal Circuit, Supreme Court of the United States, etc.