For those of you seeking a cure for your insomnia, you might want to try wading through the more than 2300-page comprehensive financial regulatory reform bill brought to us by Senator Christopher Dodd (D-CT) and Representative Barney Frank (DMA). For the rest of you, I thought I’d review the key points.
The legislation, known as the "Dodd-Frank Wall Street Reform and Consumer Protection Act," contains several executive compensation provisions, many of which are incorporated or modified from Senator Dodd’s previous bill passed by the Senate on May 20, 2010. The key provisions include:
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On May 20, 2010, the U.S. Senate passed the Restoring American Financial Stability Act of 2010. As noted in previous posts, the bill contains a number of corporate governance and executive compensation provisions that would significantly impact all public companies. It is expected that Senate and House members will begin reconciling the Senate bill next month with the Wall Street Reform and Consumer Protection Act of 2009 which passed the House last December.
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The SEC recently announced that it is reopening for 30 days the comment period with respect to its proposed proxy access rules that were initially released in June 2009. The SEC indicated that by doing so it hopes to solicit input on additional material and data that has been submitted to the public comment file since the initial August 17 deadline.
The SEC’s announcement reflects the many challenging issues that the agency is dealing with in connection with its consideration of proxy access. It is likely that the SEC is committed to mandating proxy access for public companies; however, it is also likely that the final proxy access rules will vary significantly from the rules proposed in June and may include a mechanism whereby public companies, through shareholder action, would be permitted to approve proxy access bylaws that are more restrictive and less shareholder proponent-friendly than the proxy access provisions mandated by the SEC.
What does this mean for corporate planning purposes?
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As we like to keep you informed about what your elected officials are up to, we bring the
second installment of Washington Watch…
The bulk of the financial reform bill entitled, “Restoring American Financial Stability
Act of 2009,” introduced by Senate Banking Committee Chairman Chris Dodd (D-CT), focuses
on the overhaul of financial industry regulation and agencies. However, nestled in
the more than 1,100 pages of the bill (I wonder if our Senators are getting paid by the word
these days) are significant corporate governance requirements for publicly-traded companies,
some of these provisions have been included with other proposed legislation introduced in
Congress earlier this year.
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Corporate America may be breathing a sigh of relief at least for the moment
that is… As of now it looks highly unlikely that the SEC will vote to
adopt proxy access or SEC Rule 14a-11 in time for the 2010 proxy season.
If adopted this rule would enable stockholder groups, such as activist hedge
funds or institutional investors, to place director candidates on a company’s
proxy materials at the target company’s expense. This compares to the
current system under which dissonant groups foot the bill for proxy mailings
in their efforts to unseat a current board. The costs of such an undertaking
can sometimes deter an activist.
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