Posts Tagged ‘SEC’

New executive compensation and corporate governance rules for 2010 proxy season

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Published in Lexology January 13, 2010 by Seyfarth Shaw LLP

The new rules require a company to consider how, if at all, its overall compensation for employees creates incentives that may impact its risk and management of risk. This new disclosure is only required if a company determines that risks arising from its compensation policies and practices for all employees could have a material adverse effect on the company.

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Analysis: SEC Adopts Expanded Governance and Executive Compensation Disclosure

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Compensation Policies and Risk. The new rules require disclosure of compensation policies and practices covering all employees (not just executives) if the risks arising from such policies and practices “are reasonably likely to have a material adverse effect on the company.” This is a higher standard than the “may have a material effect on the company” standard in the proposed rule. This disclosure will be separate from the CD&A.

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SEC Approves Proxy Changes

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Published in Human Resource Executive, December 9, 2009 by Anne Freedman
Final rules adopted by the U.S. Securities and Exchange Commission will require HR leaders to work with other company executives to determine whether their organizations’ compensation programs incentivize risky behavior.
Companies have always had to disclose “issues of risk as it relates to discussion of executive officers,” says Charles Tharp, executive vice president for policy of the Center on Executive Compensation in Washington.
The new rules — which require disclosure of compensation that is “reasonably likely to have a material adverse effect” on the company — now encompass employees below the named executive officers who are normally included in the proxy statement, he says.
If there is no such material adverse effect, then disclosure is not required.
The final rule — which was adopted Dec. 16 and goes into effect Feb. 28, 2010 — offers a slightly lower standard than the preliminary proposal issued in July, which required disclosure of compensation that “may have a material effect” on the company.
Scott Olsen, principal in PricewaterhouseCoopers HR Services Practice in New York, says that, regardless of whether disclosure is ultimately required in the proxy, HR leaders will need to create processes to analyze the risk involved in their organizations’ compensation programs.

link to full article

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Ahead of the Curve

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Expert Perspective by Grahall’s OmniMedia Editorial Board

It was likely with some relief that public companies heard on October 2, 2009 that the SEC would delay the implementation of Proxy Access Rule changes.  According to an article in Law360: “U.S. Securities and Exchange Commission Chairwoman Mary Schapiro said… that proposed changes to proxy access rules would not be finalized until 2010 at the earliest, following a deluge of comments to the regulator.” That’s one major issue set aside for now, but there are many more proxy changes poised for approval before the 2010 Proxy Season arrives. 
Continue reading “Ahead of the Curve” »

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It Just Makes No Sense

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Expert Perspective by Grahall’s Editorial Board

expert perspective telescopeTwo articles this week caught the attention of Grahall’s Editorial Board. 
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Grahall Comments on SEC’s Proposed Proxy Disclosure Rules

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business-strategy-chess-41In July 2009 the SEC released proposed changes to Proxy Disclosure rules “to enhance the compensation and corporate governance disclosures registrants are required to make about: their overall compensation policies and their impact on risk taking; stock and option awards of executives and directors; director and nominee qualifications and legal proceedings; company leadership structure; the board’s role in the risk management process; and potential conflicts of interest of compensation consultants that advise companies.” 

The SEC invited public comment with a deadline for submission of mid-September, 2009. Not surprisingly, many commented. Well over 100 comments have been surfaced on the SEC’s web site to date.  (To read them click here.)

Grahall, too, commented on these proposed rule changes, with comments broken down into four general subject areas:
I. enhanced risk disclosure (as it directly relates to compensation),
II. proposed changes to the summary compensation table,
III. enhanced disclosure of director qualifications to serve on the Board,
IV. concerns regarding potential conflicts of interest with respect to executive compensation consultants who provide both compensation advice and other services to the same clients.
Continue reading “Grahall Comments on SEC’s Proposed Proxy Disclosure Rules” »

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SEC Warns Brokerage CEOs on Pay

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Published in The Wall Street Journal August 31, 2009 by Sarah Lynch

The head of the Securities and Exchange Commission on Monday sent a letter to chief executives at brokerage firms warning them against offering certain compensation arrangements that may leave customers at risk.

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‘Freak’ SEC disclosure rules spotlight Blackstone CEO

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Published in Market Watch August 14, 2009 by Alistar Barr

A quirk of Securities and Exchange Commission compensation disclosure rules has left Blackstone Group Chief Executive Stephen Schwarzman at the top of a list of the highest paid executives in 2008, according to corporate-governance research firm The Corporate Library.

Link to full article.

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Proposed SEC Rule Changes for Compensation Disclosure

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Published by Equilar July 16, 2009
 
On July 10, 2009, the Securities and Exchange Commission released proposed rule changes for proxy disclosure that, if adopted, would take effect for proxy filings for a fiscal year end after December 15, 2009. Under the proposed rules, the following details have been provided regarding the key changes related to compensation. The full text of the proposed rule changes can be found here. The SEC is accepting comments on these rule changes until September 15, 2009.

Link to full article.

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