SEC Proposes New Rules on Compensation Committee Independence and Adviser Conflicts


On March 30, 2011, the Securities and Exchange Commission proposed rules to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 relating to compensation committee membership and adviser conflicts. The proposals direct national securities exchanges to adopt listing standards in three areas: compensation committee independence, the use of compensation consultants and compensation consultant conflicts of interest. The proposed rules largely mirror the requirements of corresponding provisions of the Dodd-Frank Act and reflect an ever-increasing focus on the process for determining executive compensation at public companies.

A brief description of the proposals follows. The proposing release and the text of the rules may be found at the SEC's website here. The SEC is accepting comments until April 29, 2011.

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