LegalMinds Interview: “Say on Pay” and Other Issues for the Upcoming Proxy Season


Each proxy season seems to be getting more and more complicated in terms of the new requirements as to what both the SEC and shareholders expect and this year will be no exception.

According to David Lynn, Co-chair of Morrison & Foersters‘ Public Companies and Securities Practice and former Chief Counsel of the Securities and Exchange Commission, “this year’s proxy season is going to be very interesting for public companies because we’re gonna have a lot of shareholder activism – there’s a lot of attention focused on executive compensation and corporate governance.”

“And now we have the Dodd Frank Act,” adds Lynn, “which was enacted over the summer and will require all public companies to submit to their shareholders an advisory vote on executive compensation as well as a vote on how often they should vote on their executive compensation.”

While this has been “lab tested” for companies that received TARP assistance, as Lynn puts it, for the first time “say-on-pay” is going be required for all public companies. So companies will need to start thinking very closely about their strategy and preparing for the say-on-pay vote.

In this exclusive LegalMinds/NASDAQ Securities & Capital Market Series interview, Lynn advises companies to focus on their disclosure because, while before companies had largely been thinking about writing their disclosures for the SEC or the public’s benefit, they now need to focus on convincing shareholders and building support so they cast an affirmative vote for the executive compensation program.

“This includes identifying their largest institutional investors, figuring out what sort of concerns and policies they might have about compensation programs, and going out and start talking to them.”


View the video interview at

Transcripts provided by Verbalink

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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.

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