SEC Proposes Dodd-Frank Compensation Committee And Adviser Independence Rules

Recently, the U.S. Securities and Exchange Commission (the "SEC") proposed rules to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") that will potentially affect the composition of compensation committees and the use of compensation advisers by companies listed on national securities exchanges, as well as the disclosure provided by companies regarding their use of compensation consultants.¹ Under the rules as proposed, the national securities exchanges would be directed to adopt listing standards regarding the independence of the members of the compensation committee, as well as the independence of advisers engaged by the compensation committee. Moreover, the proposed rules would require additional disclosure under Item 407 of Regulation S-K regarding the retention of compensation consultants and any conflicts of interest raised by the work of compensation consultants. The SEC seeks public comment