SEC Adopts Rules for Shareholder Advisory Votes on Executive Compensation

On January 25, the SEC adopted final proxy and disclosure rules to implement provisions of Section 14A of the Exchange Act that require shareholder advisory votes on executive compensation known as "say on pay," "say on frequency" and "say on golden parachutes." Section 14A was added to the Exchange Act by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among the noteworthy changes to the SEC's rule proposals, the final rules require companies to report on Form 8-K their determinations regarding the frequency of say-on-pay votes, and modify the standard for excluding shareholder proposals under Exchange Act Rule 14a-8 that seek subsequent say-on-pay and say-on-frequency votes. The SEC discusses the new rules in Release Nos. 33-9178 and 34-63768.

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