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.

BREAKING DOWN '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.