"Corporate Governance"

As calendar year companies work on preparing their 2011 proxy statement materials, we wanted to report on a recent development that highlights the importance of a company’s full disclosure of, and compliance with, the SEC’s executive compensation disclosure rules. Continue Reading Companies Should Not Take Lightly the Need for Full Compliance with the SEC’s Executive Compensation Disclosure Rules

On July 21, 2010, the President signed into law (Public Law 111-203) the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Reform Act”). The Reform Act implements a sweeping regulatory overhaul of the financial, banking and mortgage industries and also addresses consumer protection. Included in the Reform Act, and which is the subject of this blog, are numerous new laws affecting executive compensation and corporate governance at publicly-held companies.Continue Reading The Regulatory March to Reform Executive Compensation Practices Takes Another Step Forward

With Spring just a few weeks away, it also means that the annual proxy statement season for calendar year public companies is in full swing. February 28th marked the effective date for the SEC’s expanded executive compensation and corporate governance disclosure rules which we have previously reported on (see our December 18, 2009 blog).Continue Reading Proxy Season Heats Up as New Executive Compensation Rules are Effective and SEC Provides New Disclosure Guidance

As we recently reported in our December 18, 2009 blog article, the SEC adopted substantial amendments on December 16, 2009 that significantly expand the executive compensation and corporate governance disclosure requirements for publicly held companies. These new rules were presumably adopted now in order to become effective for the 2010 proxy season but, as we noted in our blog, the SEC’s adopting release did not provide much guidance regarding the effective dates of the new rules.Continue Reading SEC Provides Guidance on Effective Dates of Expanded Executive Compensation and Corporate Governance Rules

As anticipated, on December 16, 2009, the Securities and Exchange Commission (“SEC”) presented investors and corporate governance reform advocates with a holiday gift by adopting substantial amendments to the executive compensation and corporate governance disclosure requirements for publicly held companies. The amendments reflect the SEC’s efforts to increase investor awareness of companies’ executive compensation practices and provide shareholders with a greater voice in their companies.Continue Reading Just in Time for 2010 Proxy Season – SEC Adopts Significant Expansion of Executive Compensation and Corporate Governance Rules

The federal government’s extraordinary multi-pronged attack against executive compensation practices took another step forward, this time with the Federal Reserve Board of Governors (“FRB”) taking aim. On October 22, 2009, the FRB proposed new guidance that will dramatically affect incentive compensation arrangements for the banking industry. The proposed guidance is consistent with and largely patterned after the multi-national Financial Stability Board’s September 25, 2009 report titled “FSB Principles for Sound Compensation Practices.” Not to be left out of the headlines, on the same day, the Special Master for the government’s Troubled Asset Relief Program (“TARP”) Executive Compensation also announced significant reductions in compensation for the top executives and employees at companies receiving exceptional TARP assistance along with various other mandated reforms to compensation practices.Continue Reading Federal Government Fires More Salvos At Executive Compensation

Acting in rapid fashion, on July 31, 2009, the House of Representatives passed legislation that, if enacted, would further advance the federal government’s efforts to realign executive compensation practices. As we reported in our July 22, 2009 blog, the Treasury Department released draft legislation just two weeks earlier to require (i) an annual shareholder vote to approve named executive officer compensation, (ii) a shareholder vote to approve golden parachute arrangements and (iii) enhanced compensation committee independence and authority. The House-approved legislation, which now has been referred to the Senate’s Committee on Banking, Housing, and Urban Affairs, in some respects goes even further than what was originally contemplated by Treasury.Continue Reading House Quickly Passes Legislation to Control Executive Compensation Practices

As a part of the federal government’s on-going efforts to reform executive compensation practices and to rein in excessive compensation, the Treasury Department drafted and released new legislation (known as the “Investor Protection Act of 2009”) on July 16, 2009 concerning shareholder Say-on-Pay and the independence of compensation committees (see also the Treasury’s fact sheets on Say-on-Pay and compensation committee independence). This legislation was expected given recent Treasury pronouncements on executive compensation (see our June 18, 2009 and July 17, 2009 blogs). Representative Barney Frank (D-MA), House Financial Services Chairman, declared his support for the legislation and circulated it to other members of the committee with the near-term objective of marking up the legislation this week.Continue Reading New Draft Legislation Continues the Assault on Executive Compensation

As anticipated and in response to the “turmoil in the markets during the past 18 months”, on July 10, 2009 the Securities and Exchange Commission (“SEC”) proposed substantial amendments to the executive compensation and corporate governance disclosure requirements for publicly held companies.Continue Reading Changes in Store for 2010 Proxy Season as SEC Proposes Significant Expansion of Executive Compensation and Corporate Governance Rules and Treasury Releases Draft New Legislation

June 10,2009 marked an extraordinary day of announcements affecting executive compensation for both recipients of financial assistance from the Troubled Asset Relief Program (“TARP”) and other publicly held companies, including:

  • The U.S. Department of the Treasury (“Treasury”) issued a statement outlining the Administration’s expectations and planned legislative proposals for executive compensation reform for publicly held companies.
  • The Securities and Exchange Commission (“SEC”) announced it will soon be proposing new expanded compensation disclosure rules that could take effect in time for the 2010 proxy season.
  • The Treasury issued regulations providing its much anticipated guidance on standards for executive compensation and corporate governance for TARP recipients.
  • The Treasury established an Office of the Special Master for TARP Executive Compensation (the “Special Master”).

Continue Reading New TARP Executive Compensation Guidance and a Call for Further Reform in Executive Compensation Practices

The Emergency Economic Stabilization Act of 2008 (“EESA”), which President Bush signed into law on October 3, 2008, created the Troubled Asset Relief Program (“TARP”) under which the United States Treasury (the “Treasury”) is generally authorized to purchase troubled assets from certain financial institutions.  EESA establishes different sets of restrictions for financial institutions based on whether they sell troubled assets directly to the Treasury or whether they sell troubled assets through an auction process.  EESA also modified certain tax code provisions that placed limitations on the deductibility of compensation paid to certain executives.  This blog provides a brief overview of EESA provisions that address the executive compensation practices of financial institutions participating in TARP.Continue Reading Impact of the Emergency Economic Stabilization Act of 2008 on Executive Compensation Issues