SEC's Holiday Gift: Final Rules for 2010 Compensation and Corporate Governance Disclosures

December 21, 2009

The SEC's newly released rules for proxy disclosure of executive compensation and corporate governance apply to statements filed on or after February 28, 2010 - a period that will encompasses most, if not all, calendar year companies in the 2010 proxy season.

While generally similar to the SEC's original proposal last July, the final rules adopted last Dec. 16 by a 4-1 vote include meaningful and practical changes and clarifications that incorporate some of the voluminous public commentary submitted. Overall, the Commission took a sensible and practical approach to its goal of providing investors with the most clear and meaningful information.

Among the key areas of disclosure expanded under the new requirements:

• Compensation-Related Risk
• Grant Date Fair Value in Summary Compensation Tables (SCT)
• Use of Compensation Consultants
• Director and Nominee Experience and Qualifications
• Board Leadership
• Board's Role in Risk Oversight