Proxy Access Struck Down by Courts - SEC Delays Five Additional Dodd-Frank Compensation and Governance Provisions

August 4, 2011

On the heels of a highly critical federal court ruling that is likely to delay implementation of expanded proxy access for shareholder nomination of Board candidates under Dodd-Frank until 2012, the SEC announced it may postpone implementation of five additional compensation and governance provisions until 2013:

• Disclosure of the relationship of pay to performance
• Disclosure of the ratio of median employee total compensation to CEO total compensation
• Disclosure of policies to provide for recoupment of executive compensation in the event of an accounting restatement
• Disclosure of whether employees or directors are permitted to purchase financial instruments to hedge the value of equity securities
• Special rules for use of incentive arrangements by financial institutions 

This Alert discusses these newest developments in compensation governance and disclosure – including a possible alternative route for shareholders use to nominate Board members – and what to expect going forward.