SEC Adopts Final Rules on Say-on-Pay, Say-on-Frequency and Say-on-Parachutes

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The SEC recently adopted final rules regarding shareholder advisory votes on executive compensation , the frequency of say on-pay votes and golden parachute arrangements. Public companies must provide shareholders with a say-on-pay vote and say-on frequency vote at the first annual or other meeting of shareholders where directors are elected occurring on or after January 21, 2011. The say-on-parachutes vote and enhanced disclosure of golden parachute compensation will be required for initial filings by all public companies on or after April 25, 2011. While the final rules are similar to the proposed rules understanding the differences will assist in preparing for the 2011 proxy season.

On January 25, 2011, the U.S. Securities and Exchange Commission (SEC) adopted final rules regarding shareholder advisory votes on executive compensation (say-on-pay), the frequency of say-on-pay votes (say-on-frequency) and golden parachute arrangements (say-on-parachutes) under Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Except for certain smaller reporting companies, public companies must provide shareholders with a say-on-pay vote and say-on-frequency vote at the first annual or other meeting of shareholders where directors are elected occurring on or after January 21, 2011. The say-on-parachutes vote and enhanced disclosure of golden parachute compensation will be required for initial filings by all public companies on or after April 25, 2011. Proposed rules were issued on October 18, 2010, which was described in a McDermott White Paper available at (see article below for links). The final rules are in many respects similar to the proposed rules. Important differences between the proposed rules and the final rules, plus a detailed summary of the final rules are provided below.

Please see full article below for more information and links.

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