New NYSE and NASDAQ Rules Require Review of Compensation Committee Charters

more+
less-

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.

NYSE -

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.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Administrative Agency Updates, Business Organization Updates, Finance & Banking Updates, Securities Updates

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.

© Reed Smith | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »