SEC Proposes New Compensation Committee Requirements Under Dodd-Frank

U.S. Stock Exchanges to Determine Exemptions for Canadian and Other Foreign Private Issuers

The U.S. Securities and Exchange Commission has proposed new requirements for compensation committees of issuers listed on a U.S. stock exchange. The rules are mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The proposed new rules relate to the independence of compensation committee members, their responsibilities when retaining advisers, and disclosure about conflicts of interest of advisers who provide executive compensation consulting services.

The proposals are part of a broader movement in Canada and the United States toward heightened regulation of executive compensation and compensation committees. The market has already started to reflect the need of compensation committees for independent and objective advice, with many compensation advisers separating executive compensation consulting from the provision of other