New Rules On Golden Parachute Disclosure And Advisory Votes

As highlighted in our recent Say-on-Pay alert, the Securities and Exchange Commission has adopted new rules to require companies to disclose "golden parachute" compensation arrangements and, under certain circumstances, conduct a separate shareholder advisory vote to approve golden parachute compensation. This vote is non-binding. The rules implement new Section 14A(b) of the Securities Exchange Act of 1934 ("Exchange Act") enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Product Act.

We discuss here these new rules in more detail.

New Item 402(t)

Pursuant to Section 14A(b) of the Exchange Act, a registrant must now provide expanded disclosure in connection with solicitations of its shareholders' approval of mergers, acquisitions, consolidations, sales of all or substantially all of its assets and other similar filings. A registrant must provide expanded disclosure of compensation payable to named executive officers (NEOs) that is based on or