Type of Issuer |
NYSE |
Nasdaq |
Large Accelerated, Accelerated, and Non-Accelerated Filers |
Compliance Date: July 1, 2013 |
Compliance Date: July 1, 2013 |
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Retention and Funding of Compensation Advisers:
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Compensation committee must have:
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sole discretion to retain compensation advisers; and
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direct responsibility for appointment, compensation, and oversight of compensation advisers
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Listed companies are required to provide appropriate funding, as determined by the compensation committee, for compensation advisers
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Compensation advisers are not required to be independent
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Retention and Funding of Compensation Advisers:
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Compensation committee must have:
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sole discretion to retain compensation advisers; and
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direct responsibility for appointment, compensation, and oversight of compensation advisers
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Listed companies are required to provide appropriate funding, as determined by the compensation committee, for compensation advisers
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Compensation advisers are not required to be independent
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Selection of Advisers to Compensation Committee:
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Compensation committee will be permitted to select a compensation adviser (does not apply to in-house counsel) only after taking into consideration all factors relevant to that person's independence from management, including the factors identified in Rule 10C-12
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Compensation committee will not need to take into consideration the factors identified in Rule 10C-1 if the compensation adviser only provides advice in the following limited capacities: (i) consulting on any broad-based plan that does not discriminate in scope, terms, or operation in favor of executive officers or directors, and that is generally available to all salaried employees; and (ii) providing information that is either not customized for a particular issuer or that is customized based on parameters that are not developed by the adviser, and about which the issuer does not provide advice
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Selection of Advisers to Compensation Committee:
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Compensation committee will be permitted to select a compensation adviser (does not apply to in-house counsel) only after taking into consideration the factors identified in Rule 10C-13
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Compensation committee will not need to take into consideration the factors identified in Rule 10C-1 if the compensation adviser only provides advice in the following limited capacities: (i) consulting on any broad-based plan that does not discriminate in scope, terms, or operation in favor of executive officers or directors, and that is generally available to all salaried employees; and (ii) providing information that is either not customized for a particular issuer or that is customized based on parameters that are not developed by the adviser, and about which the issuer does not provide advice
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Compensation Committee Charter:
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Amended listing standards retain the requirement for compensation committees to have a formal written charter that specifies the committee's responsibilities, including structure, operations, and membership requirements
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The amended listing standards also require the compensation committee charter to specify additional responsibilities and authority with respect to: retaining advisers; appointing, compensating, and overseeing such advisers; considering independence factors before selecting and receiving advice from advisers; and receiving funding from the listed company to compensate such advisers
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Large Accelerated, Accelerated, and Non-Accelerated Filers |
Compliance Date: Earlier of First Annual Meeting after January 15, 2014, and October 31, 2014 |
Compliance Date: Earlier of First Annual Meeting after January 15, 2014, and October 31, 2014 |
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Enhanced Independence Requirements:
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Board required to make affirmative determination of independence of compensation committee members
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Board required to consider all factors specifically relevant to determining whether a director has a relationship to the listed company that is material to that director's ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to:
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the source of compensation of such director, including any consulting, advisory, or other compensatory fee paid by the listed company to such director;4 and
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whether such director is affiliated with the listed company, a subsidiary of the listed company, or an affiliate of a subsidiary of the listed company5
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Enhanced Independence Requirements:
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Compensation committee members will not be permitted to accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any subsidiary thereof, except for fees received for service on the board and board committees and certain retirement plan compensation
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Board will be required to consider whether the director is affiliated with the listed company, a subsidiary of the listed company, or an affiliate of a subsidiary of the listed company to determine whether such affiliation would impair the director's judgment as a member of the compensation committee6
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Compensation Committee Charter:
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Nasdaq companies will be required to have a written compensation committee charter, will need to certify that it has such a charter to Nasdaq, and will be required to review and reassess the charter on an annual basis. The compensation committee charter must specify:
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the responsibilities of the compensation committee and how it carries out those responsibilities, including structure, processes, and membership requirements;
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the compensation committee's responsibility for determining (or recommending to the board of directors for determining) the compensation of the CEO and the other executive officers;
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that the CEO may not be present during voting or deliberations with respect to his or her compensation;
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the compensation committee's responsibility and authority for retaining its own advisers and appointing, compensating, and overseeing such advisers; and
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the independence factors to be considered by the compensation committee prior to selecting an adviser.
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Requirement to Have a Compensation Committee:
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Listed companies required to have a compensation committee comprised of at least two independent members7
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Large Accelerated, Accelerated, and Non-Accelerated Filers |
Other Information |
Other Information |
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IPO Transition Rules:
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Current IPO transition rules continue to apply8
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IPO Transition Rules:
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Current IPO transition rules continue to apply9
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Cure Period:
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If a member of the compensation committee ceases to be independent for reasons outside the member's reasonable control, the member may remain a member of the compensation committee until the earlier of the next annual shareholders' meeting of the listed company or one year from the occurrence of the event that caused the member to be no longer independent, with prompt notice to the NYSE and only so long as a majority of the members of the compensation committee continue to be independent
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Cure Period:
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If there is a vacancy on the compensation committee or if one compensation committee member ceases to be independent due to circumstances beyond the member's reasonable control, the listed company will be required to regain compliance with the requirement by the earlier of its next annual shareholders' meeting or one year from the occurrence of the event that caused the failure to comply with this requirement; however, if the annual shareholders' meeting occurs no later than 180 days following the event that caused the failure to comply with this requirement, the listed company instead would have 180 days from such event to regain compliance; the listed company would be required to provide notice to Nasdaq of noncompliance
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Non-Independent Committee Member under Exceptional and Limited Circumstances:
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Consistent with current Nasdaq listing standards for compensation committees, the amended listing standards permit (under exceptional and limited circumstances) one non-independent, non-executive member of the compensation committee to serve on the committee if the compensation committee consists of three or more directors and if the individual's membership on the committee is required by the best interest of the company and its shareholders. Any director serving on the compensation committee under this exception may not serve for longer than two years. A company relying on the exception must also make certain disclosures on its website or proxy statement regarding the nature of the relationships resulting in such director being non-independent and the reasons for determining that such director's service on the committee is required by the best interest of the company and its shareholders.
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Smaller Reporting Companies |
Compliance Date: July 1, 2013 |
Compliance Date: Earlier of First Annual Meeting after January 15, 2014, and October 31, 2014 |
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Retention and Funding of Compensation Advisers:
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Compensation committee must have:
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sole discretion to retain compensation advisers; and
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direct responsibility for appointment, compensation, and oversight of compensation advisers
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Listed company required to provide for appropriate funding, as determined by the compensation committee, for compensation advisers
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Requirement to Have a Compensation Committee:
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Smaller reporting companies required to have and certify that they will have a compensation committee comprised of at least two independent members
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Compensation Committee Charter or Board Resolution:
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Smaller reporting companies will be required to have a written compensation committee charter or board resolution, which must specify:
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the responsibilities of the compensation committee and how it carries out those responsibilities, including structure, processes, and membership requirements;
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the compensation committee's responsibility for determining (or recommending to the board of directors for determining) the compensation of the CEO and the other executive officers; and
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that the CEO may not be present during voting or deliberations with respect to his or her compensation
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Cure Period:
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If there is a vacancy on the compensation committee or if one compensation committee member ceases to be independent due to circumstances beyond the member's reasonable control, the listed company will be required to regain compliance with the requirement by the earlier of its next annual shareholders' meeting or one year from the occurrence of the event that caused the failure to comply with this requirement; however, if the annual shareholders' meeting occurs no later than 180 days following the event that caused the failure to comply with this requirement, the listed company instead would have 180 days from such event to regain compliance; the listed company would be required to provide notice to Nasdaq of noncompliance
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Non-Independent Committee Member under Exceptional and Limited Circumstances:
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Consistent with current Nasdaq listing standards for compensation committees, the amended listing standards permit (under exceptional and limited circumstances) one non-independent, non-executive member of the compensation committee to serve on the committee if the compensation committee consists of three or more directors and if the individual's membership on the committee is required by the best interest of the company and its shareholders. Any director serving on the compensation committee under this exception may not serve for longer than two years. A company relying on the exception must also make certain disclosures on its website or proxy statement regarding the nature of the relationships resulting in such director being non-independent and the reasons for determining that such director's service on the committee is required by the best interest of the company and its shareholders.
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IPO Transition Rules:
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Current IPO transition rules continue to apply
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Transition Provisions:
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Companies that lose smaller company status reporting will be required to comply with amended listing standards within the following timeframes:
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Within six months from the start of the fiscal year in which it is no longer a smaller reporting company, the listed company will need to comply with the requirement that the compensation committee consider independence factors before selecting a compensation adviser. Beginning six months from the start of the fiscal year in which it is no longer a smaller reporting company, the listed company will need to comply with the following phase-in schedule relating to compensation committee composition: (i) one member must satisfy the enhanced independence requirements within six months from the beginning of its fiscal year in which it is no longer a smaller reporting company; (ii) a majority of the members must satisfy the enhanced independence requirements within nine months from the beginning of its fiscal year in which it is no longer a smaller reporting company; and (iii) all members must satisfy the enhanced independence requirements within one year from the beginning of its fiscal year in which it is no longer a smaller reporting company
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Transition Provisions:
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Companies that lose smaller company reporting status will be required to comply with the new listing standards within the following timeframes:
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Within six months from the start of the fiscal year in which it is no longer a smaller reporting company, the listed company will need to comply with the provisions relating to the authority of the compensation committee to retain compensation advisers and the requirement that the compensation committee consider the independence factors before selecting a compensation adviser and certify to Nasdaq that it has adopted a formal written compensation committee charter with specified provisions and that it has complied with or will comply with the following phase-in schedule relating to compensation committee composition: (i) one member must satisfy the enhanced independence requirements within six months from the beginning of its fiscal year in which it is no longer a smaller reporting company; (ii) a majority of the members must satisfy the enhanced independence requirements within nine months from the beginning of its fiscal year in which it is no longer a smaller reporting company; and (iii) all members must satisfy the enhanced independence requirements within one year from the beginning of its fiscal year in which it is no longer a smaller reporting company
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Foreign Private Issuers |
Amended Standards Do Not Apply
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A company may follow home country practices; however, it is required to disclose in its annual report significant ways in which its corporate governance practices differ from those followed by domestic companies under the listing standards
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Amended Standards Do Not Apply
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A company may follow home country practices; however, a foreign private issuer without an independent compensation committee will be required to disclose in its annual report the reasons why it does not have an independent compensation committee
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Controlled Companies |
Amended Standards Do Not Apply |
Amended Standards Do Not Apply |