SEC comment letters are something of a black hole. The SEC never discloses them until at least 45 days after the investigation is closed, which could take months or even years. But some companies -- perhaps out of caution -- choose to come clean about the letters and that's exactly what URBN did late Friday.
In this case, the SEC was asking the company for additional disclosure about the bonuses paid to top executives last year. While URBN initially tried to skate by with generic statements about performance objectives, the SEC asked for solid numbers. It's easiest to illustrate this with an example, so here's how the company disclosed this before the SEC started asking questions:
"The second measure is based on whether the Company's net sales for specified stores meet or exceed a dollar amount specified in each named executive officer's performance objectives"
And here's how they disclosed it on Friday:
"The second measure is based on whether the Company's net sales for specified stores meet or exceed the specified dollar of approximately $1.8 billion (the "Sales Plan Target") and whether the Company's profit for specified stores meets or exceeds the specified dollar amount of approximately $318.5 million (the "Profit Plan Target")."
See the difference? The first disclosure essentially tells you nothing, while the revised one provides some key benchmarks to help build a better model.