On June 20, 2012, the SEC, acting under a mandate of the Dodd-Frank Act, adopted rules directing the national securities exchanges to prohibit the listing of any equity security of an issuer that is not in compliance with specified compensation committee and compensation adviser requirements.
The NYSE and NASDAQ have now proposed such rules. These rules include new requirements for compensation committee charters, which should prompt NYSE and NASDAQ companies to review their charters so as bring them into compliance. The rules are subject to SEC approval, which is likely before the next round of calendar year company annual meetings.
Current NYSE rule 303A.05(b) imposes a requirement that the compensation committee have a written charter that addresses the committee’s purpose and responsibilities, and provides for an annual performance evaluation of the committee. In the current NYSE “commentary” to rule 303.05, companies are advised that the charter “should also address” committee member qualifications. Most NYSE companies have followed this recommendation and have included such provisions in the committee charter.
Please see full Alert below for further information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.