National securities exchanges and associations, such as the NYSE and NASDAQ, must adopt rules prohibiting the listing of the securities of companies that do not implement an incentive compensation recoupment policy. When a listed issuer prepares an accounting restatement as a result of its material noncompliance with any financial reporting requirement, the issuer must recover all incentive-based compensation (including stock options) paid to current or former executives during the three years preceding the date on which the restatement is required. There is no requirement that the restatement be triggered by the misconduct of the issuer or any employee. The amount of compensation recoverable will be the excess of what was actually paid to the executive over the amount that would have been paid under the accounting restatement. Issuers must also disclose their clawback policies. The Reform Act does not specify an implementation date for the clawback rules. Further, it does not expressly exclude foreign private issuers from this provision, although later rule-making may provide for such an exception.

Domestic issuers must provide shareholders with the right to cast a non-binding advisory vote approving the issuer's executive compensation as it is disclosed in the issuer's proxy statement. Unlike certain prior proposals calling for an annual vote, the Reform Act requires a vote to occur at least once every three years. All shareholder meetings occurring on or after 21 January 2011 must provide shareholders with a say-on-pay vote. In the first instance, shareholders must be given the opportunity to vote on both the say-on-pay resolution and a separate resolution to determine whether the issuer's say-on-pay vote will be held every one, two or three years. Thereafter, shareholders must be given the opportunity to re-determine the frequency of the say-on-pay vote at least once every six years.

Proxy statements and consent solicitations filed by domestic issuers in connection with mergers, acquisitions, and major asset sales are required to describe in clear and simple form, any arrangements with any named executive officers of the issuer or the acquiring company concerning compensation (whether present, deferred or contingent) that is related to the transaction. Companies will also be required to disclose the aggregate amount of compensation that will be paid or may become payable to these executives (together with the conditions to payment) as a result of the transaction. The proxy statement also must provide shareholders the opportunity to cast a separate non-binding vote to approve these payments unless the arrangements have been previously subject to a say-on-pay vote. This requirement applies only to US issuers and not to foreign private issuers. This provision applies to transaction-related meetings occurring on and after 21 January 2011.

The Reform Act requires the Securities and Exchange Commission (SEC) to direct the national securities exchanges and associations to prohibit the listing of securities of any issuer whose compensation committee is not comprised exclusively of independent directors. Rather than setting independence standards, the Reform Act tasks listing authorities with defining independence. In formulating this definition, listing authorities are to consider:

The compensation committee independence requirements do not apply to certain issuers, including "controlled companies" (that is, companies where more than 50% of the voting power is held by an individual, a group or another issuer) and foreign private issuers that provide annual disclosure explaining why they do not have an independent compensation committee.

The Reform Act provides that a compensation committee may, in its sole discretion, obtain advice of consultants, legal counsel and other advisers and must be directly responsible for the appointment, oversight and compensation of these advisers. Any committee that elects to retain a consultant, however, will not be compelled to follow the adviser's advice and must exercises its own judgment in fulfilling its duties and making compensation decisions. In selecting its advisers, compensation committees must take into account factors affecting independence.

The Reform Act directs the SEC to identify independence factors that are competitively neutral among categories of consultants, legal counsel and other advisers. Unlike prior proposed legislation, the Reform Act does not require that consultants be independent. Rather, in any proxy statement filed on or after 21 July 2011, issuers must disclose (in accordance with rules to be established by the SEC):

The Reform Act directs the SEC to require the following additional compensation-related proxy disclosure:

The Reform Act does not specify a deadline for the SEC's rule-making relating to additional disclosures.

For more information on the compensation provisions of the Reform Act , see: