SEC Final Rule: Shareholder Approval of Executive Compensation and Golden Parachute Compensation
|Approval Date||Effective Date||Compliance Date|
|February 2, 2011||April 4, 2011||April 4, 2011|
On January 25, 2011, the SEC held an open meeting concerning shareholder approval of executive compensation and golden parachute compensation under the Dodd-Frank Act. Among the topics at this meeting were frequency and disclosure requirements for say-on-pay votes, disclosure guidelines for "golden parachute" compensation arrangements and a temporary exemption for smaller reporting companies.<ref>SEC Announcements - SEC Adopts Rules for Say-on-Pay and Golden Parachute Compensation as Required Under Dodd-Frank Act. SEC. Retrieved on January 25, 2011.</ref> Final rules were added to the Federal Register on February 2, 2011.
- "Say-on-pay votes required under the Dodd-Frank Act must occur at least once every three years beginning with the first annual shareholders' meeting taking place on or after Jan. 21, 2011. Companies also are required to hold a 'frequency' vote at least once every six years in order to allow shareholders to decide how often they would like to be presented with the say-on-pay vote. Following the frequency vote, a company must disclose on an SEC Form 8-K how often it will hold the say-on-pay vote."
- "Companies also are required to provide additional disclosure regarding "golden parachute" compensation arrangements with certain executive officers in connection with merger transactions."
- "Smaller companies [public float of less than $75 million] are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after Jan. 21, 2013."