Disclosure Regarding Board Structure. The Act requires the SEC to issue rules by January 17, that require annual meeting proxy statements to disclose whether the same person or different individuals serve as chairman of the board and chief executive officer, and the reason for the structure chosen. This provision seems to merely make permanent the disclosure requirement already adopted by the SEC.
General Folder. Provisions Relating to Say on Pay The following provisions are generally effective for the proxy season. Although the vote is non-binding, proxy advisory firms such as ISS are likely to recommend votes against directors if the Company loses a Say on Pay vote and does not make significant changes to its executive compensation program. Under current SEC rules, including a Say on Pay proposal would require the Company to file a preliminary proxy statement at least 10 calendar days before filing the definitive proxy statement.
To date, Say on Pay proposals both those submitted voluntarily and those submitted under the TARP requirement have overwhelmingly resulted in votes approving the compensation. However, on a going forward basis it may be more difficult to obtain approval as a result of the elimination of broker discretionary voting on this issue as required under another provision of the Act. There are many questions as to how this vote should be conducted, since it contemplates a choice of one of three alternatives rather than a simple Yes or No vote.
Although the language is not clear, the provision seems intended to require target companies to hold an advisory vote on arrangements between their named executive officers and either the target or the acquiring company, and to require acquiring companies that are seeking shareholder approval of the transaction to hold an advisory vote on arrangements between the acquiring company and its own named executive officers.
While arrangements entered into in contemplation of the transaction after the last Say on Pay vote presumably including employment agreements with the acquiring company would be subject to this additional vote, it is not clear whether the vote would also be required to cover, for example, routine equity awards granted since the last Say on Pay vote.
It remains to be seen whether this provision will have any practical effect if shareholders vote against compensation paid by target companies whose outside directors will presumably no longer be involved with the company after the transaction.
Compensation Committees and Consultants The Act provides that the following provisions are to be implemented through stock exchange listing standards. The first three of these factors appear to relate to the consulting entity, while the last two of the factors appear to relate to the individual directly providing the consulting services, but the SEC may well extend the scope of one or more of these factors to include both the entity and the individual.
We expect the SEC to require a compensation committee to confirm that it took the required factors into consideration and, if applicable, explain its reasons for selecting a consultant or adviser that does not satisfy all of the independence factors. It remains to be seen whether the compensation element of this comparison will be required to be shown as a single total for the group of named executive officers or on a person-by-person basis.
How should deferred compensation or pension accruals be treated? The Act is silent regarding the time period over which the pay and performance are to be compared. SEC rules will need to define the employee group for which the median compensation is determined. For example, will it include part-time employees? The provision does not require the Company to adopt such a policy, but merely to disclose whether or not it has one. Clawbacks The Act provides that the following provisions are to be implemented through stock exchange listing standards.
Similarly, how will the clawback rules apply to discretionary bonuses? Zetoony Computing on the Edge by: Robert M. Kamer and Aubrey A. Slack and Peter A. Paolillo and Ellen L. Mitchell and F. Delaney and Kristina M. Kahlon and Aron C. Thomas and Michael P. Neifach and Otieno B. Porzio and Joshua S. Article By. All Federal. Tuesday, January 21, All Rights Reserved. Related Legal Headlines.
By Karen J. By Matthew G. By Simona Mola. By Arthur Don. About this Author. Founding Partner. Actively scan device characteristics for identification. Use precise geolocation data.
Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights.
Measure content performance. Develop and improve products. List of Partners vendors. Both followed costly but very different kinds of scandals and corporate collapses that rocked Wall Street. Sarbanes-Oxley was intended to protect investors from corporate accounting fraud by strengthening the accuracy and reliability of financial disclosures. It was passed by Congress in after a number of billion-dollar accounting scandals, perhaps most famously at energy-trading company Enron and telecommunications company WorldCom.
The Dodd-Frank Act was passed in in response to the financial crisis , which brought Wall Street to its knees. As both Sarbanes-Oxley and Dodd-Frank indicate, if the fraud is bad enough, Congress will feel a need to react. And even the best intentions of lawmakers and government officials can have many harmful effects on business. As a result, the vast majority of ethical business officials, who did nothing wrong, end up suffering the consequences of greater government regulation due to the misbehavior of a few bad actors.
More stringent ethical standards and greater responsibility throughout the business world could limit the times that Congress feels that it must act to curtail corporate misconduct. Oppel, Jr. It was at least plausible to argue that the one unconstitutional provision would be grounds for striking down the entire Sarbanes-Oxley law.
Not surprisingly, Dodd-Frank does include a severability clause. Current low tax rates on dividends, combined with low borrowing costs, represent an historic opportunity for U. Twitter is a form of electronic charisma that can attract or repel followers. This article explores the uses and limitations of Twitter and analyzes its success based on the definition of charisma.
The emergence of online discount brokerages, unbundling of services, and disintermediation are three trends that will continue to challenge the traditional role of the real estate broker. Businesses can best benefit from social media by having a good overall strategy and knowing how to listen, participate, and measure results.
With this issue we are delighted to introduce you to our new name, the Graziadio Business Review, and bring you our new design, which we think you will find much more user-friendly. One of the critical components of financial statements is the audit report. While sexual harassment makes larger headlines, workplace bullying can be just as detrimental to employees and the company for which they work.
Read the summaries of the Keynote Speakers: Steve Collis and Susan Dentzer as well as the summaries of the three panels for the Healthcare Symposium. Business Law. Lesson No. Share Facebook. Author of the article Author's profile. A graduate of Vanderbilt University School of Law, he has also taught political science, public policy, and communications courses at Pepperdine. More articles from Volume 13 Issue 4. The Charisma of Twitter Twitter is a form of electronic charisma that can attract or repel followers.
The Changing Role of the Residential Real Estate Broker The emergence of online discount brokerages, unbundling of services, and disintermediation are three trends that will continue to challenge the traditional role of the real estate broker. How Audit Materiality is Material to You One of the critical components of financial statements is the audit report. Bullying Before Sexual Harassment While sexual harassment makes larger headlines, workplace bullying can be just as detrimental to employees and the company for which they work.
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