In preparation for the 2011 proxy season, there are a number of new developments companies must take into account when drafting proxy statements and annual reports in the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and the release of proposed rules by the Securities and Exchange Commission (“SEC”). Principally, companies will now be required to hold shareholder advisory votes on executive compensation (“Say on Pay”), the frequency of say on pay votes (“Say on Frequency”), and golden parachute compensation (“Say on Golden Parachutes”). It is expected that the SEC will issue additional rules throughout the year to implement provisions of the Dodd-Frank Act. While these rules will not be effective for the 2011 spring proxy season, companies should keep apprised of these developments and may want to consider reviewing other policies and practices in anticipation of the new rules.
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