SEC Cracks Open Comp Accounting Charges at Energy Drink Company

Jerry Hodgkins’ commentary was included in an Agenda article on the Securities and Exchange Commission’s (SEC) announcement of charges against energy drink company Celsius alleging improper accounting controls violations for allegedly amending its vesting period for stock-based compensation for six departing employees and retiring board members in 2021.

Jerry noted that the SEC brought an enforcement sweep that focused on stock-based compensation over a decade ago, and while the allegations against Celsius are different from that sweep, they both offer lessons on shareholder trust. He further points out, the "SEC's case against Celsius is a good reminder of the importance of aligning incentive-based compensation with the interests of stockholders.” The Celsius case sends a signal that when compensation is improved for executives, "it is important to ensure that stockholders understand the full picture so they can assess whether those officers are appropriately incentivized to increase shareholder value," he said.