Katie Couric Clause

Definition of 'Katie Couric Clause'


A slang term for a controversial proposed clause from a Securities and Exchange Commission (SEC) rule (formally known as the Executive Compensation and Related Party Disclosure). This clause, if implemented, would require publicly-traded companies to disclose not only the salaries of their top five executives, but also those of top earning non-executives, including actors, directors and TV news anchors.

The term refers to former "Today Show" host Katie Couric, who became CBS's highest paid newscaster in April 2006, with a reported salary of US $15 million over five years.

As of July 26, 2006 the SEC decided not to implement this specific clause, but did agree that rules regarding highly compensated non-executives merit a subsequent look.

Investopedia explains 'Katie Couric Clause'


Many major media companies, such as CBS, NBC and the Walt Disney Co., opposed the SEC's controversial proposal. Media giants are often reluctant to disclose detailed compensation information, which might invade the privacy of its employees and also expose proprietary information that may make it easier for key employees to be headhunted. While the employees in question would not have to be named, many believe that it would not be hard to attach a name to the details.

Current SEC rules demand that salaries of the top five executives in publicly-traded companies to be disclosed. If this new rule is adopted, companies would have to disclose the overall compensation of up to three non-executive employees whose total compensation exceeds that of any of its top five managers. Supporters of this proposal say this rule would create greater transparency and give investors increased access to information, which should make for better-informed decisions.



comments powered by Disqus
Hot Definitions
  1. Family Limited Partnership - FLP

    A type of partnership designed to centralize family business or investment accounts. FLPs pool together a family's assets into one single family-owned business partnership that family members own shares of. FLPs are frequently used as an estate tax minimization strategy, as shares in the FLP can be transferred between generations, at lower taxation rates than would be applied to the partnership's holdings.
  2. Yield Burning

    The illegal practice of underwriters marking up the prices on bonds for the purpose of reducing the yield on the bond. This practice, referred to as "burning the yield," is done after the bond is placed in escrow for an investor who is awaiting repayment.
  3. Marginal Analysis

    An examination of the additional benefits of an activity compared to the additional costs of that activity. Companies use marginal analysis as a decision-making tool to help them maximize their profits. Individuals unconsciously use marginal analysis to make a host of everyday decisions. Marginal analysis is also widely used in microeconomics when analyzing how a complex system is affected by marginal manipulation of its comprising variables.
  4. Treasury Inflation Protected Securities - TIPS

    A treasury security that is indexed to inflation in order to protect investors from the negative effects of inflation. TIPS are considered an extremely low-risk investment since they are backed by the U.S. government and since their par value rises with inflation, as measured by the Consumer Price Index, while their interest rate remains fixed.
  5. Gilt-Edged Switching

    The selling and repurchasing of certain high-grade stocks or bonds to capture profits. Gilt-edged switching involves gilt-edged security, which can be high-grade stock or bond issued by a financially stable company such as the Blue Chip companies or by certain governments.
  6. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There are two types of partners in this type of partnership: The limited partner is the person or group that provides the capital to the MLP and receives periodic income distributions from the MLP's cash flow, whereas the general partner is the party responsible for managing the MLP's affairs and receives compensation that is linked to the performance of the venture.
Trading Center