Dodd–Frank Wall Street Reform and Consumer Protection Act: Financial Reform and New Executive Compensation Rules


The Dodd-Frank Wall Street Reform and Consumer Protection Act ("the "Dodd-Frank Act" or "Act") was signed into law July 21, 2010 by President Obama, to promote the financial stability of the United States by improving accountability and transparency in the financial system. To that end, the Dodd Frank Act reforms the U.S. financial regulatory system, but its provisions also apply beyond the financial sector. Most public companies will be affected by the Act, which includes a number of substantive requirements and enhanced disclosure obligations relating to executive compensation practices.

Accordingly, public companies should begin reviewing the upcoming changes and possible approaches for meeting the

new requirements. Although many of the new provisions require that the Securities and Exchange Commission ("SEC")

establish new rules, amend current Item 402 of Regulation S-K ("Item 402"), or direct national security exchanges or associations to establish new rules before becoming effective, it is widely anticipated that the SEC will have taken necessary action for the rules to be effective by the upcoming proxy season.

The following is a brief description of the Dodd-Frank Act's most significant rules relating to executive compensation practices:

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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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