On October 18, 2010, the U.S. Securities and Exchange Commission (SEC) issued proposed rules regarding shareholder advisory votes on executive compensation and golden parachute arrangements under Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). There are three separate shareholder advisory votes under Section 951 that are covered by the proposed rules:
- “Say-on-Pay Vote” – voting on whether to approve the compensation of named executive officers as disclosed under federal securities law.
- “Say-on-Frequency Vote” – voting at least once every six years on whether the say-on-pay vote should occur every one, two or three years.
- “Say-on-Parachutes Vote” – voting on whether to approve so-called golden parachute compensation in connection with a business combination.
For more information and analysis regarding how the rules could affect the 2011 proxy season, click here.
The proposed rules are available at www.sec.gov/rules/proposed/2010/33-9153.pdf.