"Say on Pay" Rules Proposed

Summary

The SEC has released a rule proposal ("Proposal") designed to implement provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements. We believe the final rules will closely track the Proposal, so issuers preparing proxy statements now should draft with the Proposal in mind. Proxy statements for meetings on or after January 21, 2011 are affected.

The Dodd-Frank Act requires all public companies to:

• Conduct a shareholder advisory vote to approve the compensation of named executive officers – a "Say on Pay Vote" – at least once every three years;
• Conduct a shareholder advisory vote to determine whether the Say on Pay Vote should be taken every 1, 2 or 3 years – a "Say on Pay Frequency Vote" – at least once every six years; and,