Archives: Proxy Season

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Pay Ratio Disclosures are an Employee-Relations Opportunity … Really

Most companies are now devoting substantial resources and effort to ensuring compliance with the SEC’s new rules requiring disclosure of the ratio of the CEO’s and median employee’s respective annual total compensation. Because the disclosure is required for fiscal years beginning on or after January 1, 2017, calendar-year-end companies must include it in their upcoming … Continue Reading

New SEC Pay Ratio Disclosure Guidance

As everyone knows by now, the SEC amended Item 402 of Regulation S-K, as required by the Dodd-Frank Act, to state that all companies required to provide executive compensation disclosure under Item 402(c) of Regulation S-K must also provide new executive compensation disclosure regarding: the median of annual total compensation of all employees, the annual … Continue Reading

Don't Forget the Say-on-Frequency Form 8-K

The proxy rules require that public companies submit a nonbinding proposal to their shareholders every six years regarding how often they should hold say-on-pay votes, known as “say-on-frequency.” Most companies held their first say-on-frequency vote in 2011 and will be including another vote in their 2017 proxy statements. (“Smaller reporting companies” were not required to … Continue Reading

It's Time to Consider Virtual Annual Meetings

More and more companies are moving to virtual-only or hybrid (both virtual and physical) annual shareholder meetings, though they remain in a substantial minority. Other companies sometimes pause to consider virtual meetings as they begin the annual proxy season sprint, then abandon the notion due to the press of time. Many (most?) companies haven’t yet … Continue Reading

Fixing the Shareholder Proposal Process

Battles over proxy access have taken center stage over the past few years in the form of activist shareholder proposals and proposed SEC rulemaking. (See this Doug’s Note.) Now Business Roundtable is suggesting that the entire Rule 14a-8 shareholder proposal process is flawed and has offered solutions to fix it. Business Roundtable, an association of … Continue Reading

Tips for Seeking Shareholder Approval of Equity Benefit Plans

Most public companies regularly submit equity benefit plans to their shareholders for approval. As a general rule, both NYSE and Nasdaq require that every new benefit plan, and any material amendment to an existing plan, be approved by the shareholders if it offers equity to the company’s officers, directors, employees or consultants (subject to certain … Continue Reading

A Say-on-Frequency Reminder

The proxy rules require that public companies submit a proposal to their shareholders every six years regarding how often they should have say-on-pay votes, known as “say-on-frequency”. Most companies held their first say-on-frequency vote in 2011, which means that it will be time for another vote in 2017. (“Smaller reporting companies” were not required to … Continue Reading

SEC Proposes Rules to Require Universal Proxy Cards and other Changes

As SEC Chair Mary Jo White indicated in a June 2015 speech at the Society of Corporate Secretaries and Governance Professionals National Conference in Chicago, the SEC has now proposed new rules to modify the venerable proxy card to require: “universal” proxy cards and certain other procedural changes in contested director elections, and other form … Continue Reading

New Nasdaq Disclosure Requirement–Third-Party Payments to Directors

Effective August 1, 2016, new Nasdaq Rule 5250(b)(3) requires Nasdaq-listed companies to disclose the material terms of all agreements and arrangements between a director or director nominee and a third party related to “compensation” or “other payments” for a director’s service as a director or for a nominee’s candidacy. What payments must be disclosed? The … Continue Reading

New SEC Guidance on Proxy Card Descriptions

Amazingly, the SEC staff continues to scrutinize Securities Exchange Rule 14a-4(a)(3)’s proxy card parameters. As you may recall, the staff recently grappled with the ever-murky “unbundling” aspect of that rule: first via three C&DIs issued in January 2014 (see this Doug’s Note) then again in October 2015 in the form of Q&As dealing specifically with … Continue Reading

Beefing Up Director Compensation Disclosures

With calendar year companies currently in the midst of drafting their proxy statements, it is time to consider the often overlooked director compensation disclosures. Changes in director compensation arrangements. Director compensation continues to increase in amount and complexity as companies strive to keep up with directors’ increasingly burdensome duties. For example, boards are now taking … Continue Reading

Political Spending Disclosure Goes Mainstream

Political spending disclosure has had an irregular history, waxing and waning over the last decade according to a seminal Supreme Court decision, fluctuating SEC rulemaking and activist shareholder agendas and evolving views of good corporate practice. Back in January 2014, I speculated that “voluntary political spending information may be on its way to ‘best practices’ … Continue Reading

A New Shareholder Proposal Staff Legal Bulletin–Just in Time for Proxy Season

Just in time for calendar year companies to begin receiving shareholder proposals, the SEC staff has released Staff Legal Bulletin No. 14H, which closes the loop on the controversy initiated by a Whole Foods proxy access shareholder proposal. A brief summary of the controversy… In the fall of 2014, Whole Foods Market, Inc. received a … Continue Reading

Prepping for Proxy Season

Every year about this time calendar-year-end companies should begin to prepare for the coming proxy season by looking back on lessons learned this year, considering recent SEC rulemaking and evaluating latest governance trends. This year has been particularly active on several fronts, which makes advance preparation all the more important. Here is a list of … Continue Reading

Pay Ratio Disclosure: Lemonade from Lemons

Well, the SEC’s new pay ratio rules are finally out. We’ve all known they were coming for quite some time, dating all the way back to their origin in 2010—Dodd-Frank’s Section 953(b) mandate—followed by the SEC’s proposed rule back in September 2013. And while certain shareholder activists and corporate governance advocacy groups are no doubt … Continue Reading

At Last–the SEC's Compensation Clawback Proposal

Some five years ago, Section 954 of the Dodd-Frank Act instructed the SEC to adopt rules mandating that national securities exchanges require listed companies to implement incentive compensation recovery (or clawback) policies. Last week, the SEC proposed the long-awaited new rules, which SEC Chair Mary Jo White described as “the last of the Dodd-Frank Act … Continue Reading

Are Universal Proxy Ballots On the Way?

Improving the proxy process remains front and center at the SEC and continues to garner media headlines. A recent high-profile example was this past proxy season’s focus on proxy access shareholder proposals, including the SEC’s Whole Foods flip flop and its suspension of Rule 14a-8(i)(9) “direct conflict” no-action letters. (See this Doug’s Note.) Now comes this … Continue Reading

The New Pay-for-Performance Proposal–A Misstep by the SEC

  The SEC last week finally proposed rules mandated by Dodd-Frank providing for disclosure of the relationship between compensation actually paid to executives and company financial performance. While it is important to remember that Congress, not the SEC, initiated this rulemaking (meaning that the staff probably wishes it didn’t have to be sidetracked by this … Continue Reading
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