USA : SEC Proposes Rules on "Say on Pay" and Proxy Vote Reporting

The Securities and Exchange Commission has proposed rules that would enable shareholders to cast advisory votes on executive compensation and "golden parachute" arrangements. The rules are called for by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the proposed rules, public companies subject to the federal proxy rules would be required to:

• provide their shareholders with an advisory vote on executive compensation and an advisory vote on the desired frequency of these votes;
• provide shareholders with an advisory vote on compensation arrangements and understandings in connection with merger transactions, known as "golden parachute" arrangements; and
• provide additional disclosure of "golden parachute" arrangements in merger proxy statements.

The proposed rules would also require that institutional investment managers report their votes on executive compensation and "golden parachute" arrangements at least annually, unless the votes are otherwise required to be reported publicly by SEC rules.

For complete details on the rules see here.