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SEC Comment Letter for FTI CONSULTING, INC (FCN) (CIK 0000887936) (FCN) — Aug 22, 2007

FTI CONSULTING, INC (FCN) (CIK 0000887936)
Date: Aug. 22, 2007 · CIK: 0000887936 · Accession: 0000000000-07-041056

AI Filing Summary & Sentiment

Sentiment
Urgency
Document Type
Confidence
SEC Posture
Company Posture

Summary

Reasoning

Date
August 21, 2007
Author
Pam Howell Special Counsel
Form
UPLOAD
Company
FTI CONSULTING, INC (FCN) (CIK 0000887936)

Letter

August 21, 2007 Mail Stop 3561 By U.S. Mail and facsimile to (410) 951-4878 Jack B. Dunn IV President and Chief Executive Officer FTI Consulting Inc. 500 East Pratt Street, Suite 1400 Baltimore, MD 21202

Re: FTI Consulting Inc. Definitive 14A Filed April 11, 2007 File No. 1-14875

Dear Mr. Dunn: We have limited our review of your definitive proxy statement to your executive compensation and other related disclosure a nd have the following comments. Our review of your filing is part of the Division’s focused review of executive compensation disclosure. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call me at the telephone number listed at the e nd of this letter. In some comments we have asked you to provide us with additional information so we may better understand your disclosure. Pl ease do so within the time frame set forth below. You should comply with the remain ing comments in all future filings, as applicable. Please confirm in writing that you will do so and also explain to us how you intend to comply. Please unders tand that after ou r review of all of your responses, we may raise additional comments. If you disagree with any of these commen ts, we will consider your explanation as to why our comment is inapplicable or a revisi on is unnecessary. Please be as detailed as necessary in your explanation.

Jack B. Dunn IV FTI Consulting Inc. August 21, 2007 Page 2 Compensation Discussion and Analysis, page 32

1. Individual officer performance is one of the factors considered in making executive compensation decisions. Please disclose how the specific forms of compensation are structured and implemented to reflect each named executive officer’s individual performance and/or in dividual contribution to these items of the registrant’s performance, describing the elements of individual performance and/or contribution that are taken in to account. See Item 402(b)(2)(vii) of Regulation S-K. In addition, disclose substantial deviations in individual elements of compensation. For example, we note that equity awards made to Mr. Shaughnessy (2006 grant date fair value of $3.8 million) are substantially higher than the next highest award (2006 grant date fair value of $2.3 million for awards made to the CEO). 2. You benchmark your compensation with the comparable companies listed on page 33. Analyze the role of this comparable company benchmarking in determining overall compensation and a ny individual components – such as whether you have established specific benchmarks for total compensation or individual components of co mpensation as compared to these companies. If so, disclosure where you target each element of compensation against the comparator companies and where actual payments fall within targeted parameters. To the extent actual compensation was outside a ta rgeted percentile ra nge, please explain why.

Short-Term Non-Equity Incentive or Bonus Compensation, page 37

3. You state that the 2007 performance target is based on company-wide earnings per share. Disclose this performance target since it appear s to have been set as of the filing of this proxy statement or provide a supplemental analysis as to why it is appropriate to omit this target pursu ant to Instruction 4 to Item 402(b) of Regulation S-K. To the extent that it is appropriate to omit specific targets, please provide the disclosure pursua nt to Instruction 4 to Item 402(b) of Regulation S-K. General statements regarding the level of difficulty, or ease, associated with achieving performance goals either corporat ely or individually are not sufficient. In discussing how likely it will be for the company to achieve the target levels or other factors, provide as much detail as necessary without providing information that poses a reasonable risk of competitive harm. 4. Provide clear disclosure of the specific f actors considered in determining to grant the special discretionary cash bonus paymen ts made to certain executive officers and analyze how those factors were used to determine the actual award granted for each named executive. The current disclosure on page 39 is very general in nature. See Item 402(b)(1)(v) of Regulation S-K.

Jack B. Dunn IV FTI Consulting Inc. August 21, 2007 Page 3 Grants of Plan Based Awards for Fis cal Year Ended December 31, 2006, page 48

5. The non-equity incentive plan award fo r Mr. DiNapoli to receive a minimum bonus payment of $500,000 upon the achievement of $1 EPS appears to be separate from the incentive compensati on plan with a threshold EPS of $1.46. Please provide separate line items to reflect the estimated payouts under each award. See Instruction 1 to It em 402(d) of Regulation S-K.

Outstanding Equity Awards at Fiscal Year-End, page 50

6. Clearly disclose the vesting dates of options held at fiscal year end by footnote. See Instruction 2 to Item 402( f)(2) of Regulation S-K. For example, it is unclear from footnote four when the one year and eight year dates for each award will occur.

Employment Agreements and Potential Termination and Change in Control Payments, page 54 7. In the Compensation Discussion and Analysis, please discuss how the arrangements for the potential payments to be made upon termination or change in control fit into your overall compensa tion objectives and affect the decisions you made regarding other compensati on elements. Also, explain why you structured the terms and payout leve ls of these arrangements as you did.

Please respond to our comments by September 21, 2007, or tell us by that time when you will provide us with a response. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. When you respond to our comments, please provide, in writing, a statement from the company acknowledging that:

• the company is responsible for the adequacy and accuracy of the disclosure in the filing;

• staff comments or changes to disclo sure in response to comments do not foreclose the Commission from taking a ny action with respect to the filing; and

Jack B. Dunn IV FTI Consulting Inc. August 21, 2007 Page 4 • the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any pers on under the federal s ecurities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Di vision of Corporation Finance in connection with our review of your filing or in response to comments. Please contact me at (202) 551-3357 with any questions.

Sincerely,
Pam Howell Special Counsel

Show Raw Text
August 21, 2007  Mail Stop 3561

By U.S. Mail and facsimile to (410) 951-4878

Jack B. Dunn IV President and Chief Executive Officer FTI Consulting Inc. 500 East Pratt Street, Suite 1400 Baltimore, MD 21202

Re: FTI Consulting Inc.
 Definitive 14A
Filed April 11, 2007
 File No. 1-14875

Dear Mr. Dunn:
 We have limited our review of your definitive proxy statement to your executive
compensation and other related disclosure a nd have the following comments.  Our review
of your filing is part of the Division’s  focused review of executive compensation
disclosure.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filings.  We look forward to working with you in these respects.  We
welcome any questions you may have about our  comments or any other aspect of our
review.  Feel free to call me at the telephone number listed at the e nd of this letter.
  In some comments we have asked you to provide us with additional information so we may better understand your disclosure.  Pl ease do so within the time frame set forth
below.  You should comply with the remain ing comments in all future filings, as
applicable.  Please confirm in writing that you will do so and also explain to us how you
intend to comply.  Please unders tand that after ou r review of all of your responses, we
may raise additional comments.     If you disagree with any of these commen ts, we will consider your explanation as
to why our comment is inapplicable or a revisi on is unnecessary.  Please be as detailed as
necessary in your explanation.

Jack B. Dunn IV
FTI Consulting Inc. August 21, 2007 Page 2  Compensation Discussion and Analysis, page 32

1. Individual officer performance is one of the factors considered in making
executive compensation decisions.  Please disclose how the specific forms of compensation are structured and implemented to reflect each named executive officer’s individual performance and/or in dividual contribution to these items of
the registrant’s performance, describing the elements of individual performance
and/or contribution that are taken in to account.  See Item 402(b)(2)(vii) of
Regulation S-K.  In addition, disclose substantial deviations in individual
elements of compensation.  For example, we  note that equity awards made to Mr.
Shaughnessy (2006 grant date fair value of $3.8 million) are substantially higher
than the next highest award (2006 grant date fair value of $2.3 million for awards made to the CEO).
2. You benchmark your compensation with the comparable companies listed on
page 33.  Analyze the role of this comparable company benchmarking in
determining overall compensation and a ny individual components – such as
whether you have established specific benchmarks for total compensation or
individual components of co mpensation as compared to these companies.  If so,
disclosure where you target each element of compensation against the comparator
companies and where actual payments fall within targeted parameters. To the extent actual compensation was outside a ta rgeted percentile ra nge, please explain
why.

Short-Term Non-Equity Incentive  or Bonus Compensation, page 37

3. You state that the 2007 performance target  is based on company-wide earnings
per share.  Disclose this performance target  since it appear s to have been set as of
the filing of this proxy statement or provide  a supplemental analysis as to why it
is appropriate to omit this target pursu ant to Instruction 4 to Item 402(b) of
Regulation S-K.  To the extent  that it is appropriate to omit specific targets, please
provide the disclosure pursua nt to Instruction 4 to Item  402(b) of Regulation S-K.
General statements regarding the level of  difficulty, or ease, associated with
achieving performance goals either corporat ely or individually are not sufficient.
In discussing how likely it will be for the company to achieve the target levels or
other factors, provide as much detail as  necessary without providing information
that poses a reasonable risk of competitive harm.
4. Provide clear disclosure of the specific f actors considered in determining to grant
the special discretionary cash bonus paymen ts made to certain executive officers
and analyze how those factors were used  to determine the actual award granted
for each named executive.  The current disclosure on page 39 is very general in nature.  See Item 402(b)(1)(v) of Regulation S-K.

Jack B. Dunn IV
FTI Consulting Inc. August 21, 2007 Page 3  Grants of Plan Based Awards for Fis cal Year Ended December 31, 2006, page 48

5. The non-equity incentive plan award fo r Mr. DiNapoli to receive a minimum
bonus payment of $500,000 upon the achievement of $1 EPS appears to be separate from the incentive compensati on plan with a threshold EPS of $1.46.
Please provide separate line items to reflect the estimated payouts under each
award.  See Instruction 1 to It em 402(d) of Regulation S-K.

Outstanding Equity Awards at Fiscal Year-End, page 50

6. Clearly disclose the vesting dates of options  held at fiscal year end by footnote.
See Instruction 2 to Item 402( f)(2) of Regulation S-K.  For example, it is unclear
from footnote four when the one year and eight year dates for each award will occur.

Employment Agreements and Potential Termination and Change in Control Payments,
page 54
7. In the Compensation Discussion and Analysis, please discuss how the
arrangements for the potential payments to be made upon termination or change
in control fit into your overall compensa tion objectives and affect the decisions
you made regarding other compensati on elements.  Also, explain why you
structured the terms and payout leve ls of these arrangements as you did.

 Please respond to our comments by September 21, 2007, or tell us by that time
when you will provide us with a response.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy  of the disclosures they have made.
  When you respond to our comments, please provide, in writing, a statement from the company acknowledging that:

• the company is responsible for the adequacy and accuracy of the disclosure in
the filing;

• staff comments or changes to disclo sure in response to comments do not
foreclose the Commission from taking a ny action with respect to the filing;
and

Jack B. Dunn IV
FTI Consulting Inc. August 21, 2007 Page 4
• the company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any pers on under the federal s ecurities laws of
the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to comments.
 Please contact me at (202) 551-3357 with any questions.

Sincerely,

Pam Howell Special Counsel