The wait for financial regulatory reform legislation is over. President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd Frank Act) into law on July 21, 2010. The Dodd Frank Act, while primarily focused on financial regulations, also includes numerous measures affecting corporate governance and executive compensation.
The signing of the Dodd Frank Act follows a lengthy and sometimes contentious process. The Senate passed the Act on July 15 by a vote of 60 to 39 after reconciling the Senate’s Restoring American Financial Stability Act of 2010 (the RAFSA)1 and the U.S. House of Representatives’ Wall Street Reform and Consumer Protection Act (the House bill).2 While many of the corporate governance-related measures in the Dodd Frank Act are similar to those contained in the RAFSA, the final legislation does differ from the RAFSA in a number of areas, including requirements with regard to non-binding shareholder votes on “golden parachutes,” the frequency of Say on Pay votes and the elimination of the RAFSA’s majority voting standard for the election of directors.
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