By Carrie Johnson
Washington Post Staff Writer
Friday, January 26, 2007; D02

The Council of Institutional Investors, a coalition of public, labor and corporate pension funds, yesterday criticized securities regulators for making what it called an eleventh-hour revision to the way businesses report executive compensation without giving shareholders time to propose changes.

A few days before Christmas, the Securities and Exchange Commission released a rule requiring companies to disclose more information about how they pay their top executives. The rule changed how companies present executive compensation in tables designed to be easier for investors to grasp. The changes went into effect almost immediately for financial statements filed in 2007.

At the time, SEC Chairman Christopher Cox said the revisions were intended to make it easier for investors to understand how much executives were paid. He added that the revisions would better reflect actual payouts as opposed to hypothetical earnings that corporate officials might never receive. In some cases, the total amount of compensation might increase under the changes, Cox said.

In a letter sent to regulators yesterday, Jeffrey P. Mahoney, the council's general counsel, wrote that it is "questionable" whether the new requirements will make information easier for investors to understand. He added that 11 groups had expressed support for the change, including the U.S. Chamber of Commerce and the American Institute of Certified Public Accountants, but that the support did not "appear to include a single investor or investor-based organization."

Mahoney said that the changes seemed to bring the most benefits for companies in the technology sector and elsewhere that accelerated the vesting of their stock options in advance of accounting rules that forced businesses to treat options as an expense on their books.

SEC spokesman John Nester said that the pay disclosures that have been filed this year are clearer than ever and that in some cases the total amount of compensation has increased -- rather than resulting in an across-the-board decrease as some critics had suggested.