Advisory Votes On Executive Compensation May Have Teeth

While the executive compensation votes mandated by the Dodd-Frank Act are just advisory, they do have the potential for significant impact. With the popularity of majority vote requirements in uncontested elections, incumbent directors may face significant withhold campaigns if they appear to ignore stockholder preferences.

This means that accurately measuring stockholder preferences will be key.

The Securities and Exchange Commission’s advisory vote proposal limits both stockholder choice and the means to measure stockholder preferences. Given the importance of this proposal, I think it warrants comments in support of greater choice and accuracy. The comment period on this proposal expires next Thursday.

Please see full article below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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