On May 20, 2010, the Senate passed the Restoring American Financial Stability Act of 2010 (“RAFSA”). The legislation mandates major reforms of the United States financial regulatory system that are designed to prevent future financial crises, but it also includes significant changes to executive compensation and corporate governance rules for all public companies, including say-on-pay, compensation clawbacks, compensation committee and adviser independence, and majority voting for directors. RAFSA, along with a similar bill that was passed by the House of Representatives late last year, now goes to a House-Senate Conference Committee for reconciliation. The resulting compromise bill will be sent to the President for signature, perhaps as early as the July 4th recess.

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