SEC Issues Proposed Rule Expanding Required Proxy Disclosures

On July 10, 2009, the SEC proposed changes to its executive compensation and governance disclosure requirements that would expand the disclosures companies are required to make regarding:

• Their compensation policies
• The impact such policies may have on their risk-management policies and practices
• The qualifications and background of directors and director nominees
• The companies' leadership structures
• Potential conflicts of interest involving the use of compensation consultants

The proposing release also would change the framework for disclosure of stock and option awards, require earlier disclosure of shareholder voting results, and clarify certain proxy solicitation rules. The SEC intends the proposed rule changes, if adopted, to be effective for the 2010 proxy season.