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SEC Delays Certain Executive Compensation Rulemaking Under Dodd-Frank
Practical Law Legal Update 7-507-1201 (Approx. 3 pages)
SEC Delays Certain Executive Compensation Rulemaking Under Dodd-Frank
by PLC Employee Benefits & Executive Compensation
| Published on 02 Aug 2011 • USA (National/Federal) |
An update on the SEC's delay in its planned implementation of certain executive compensation requirements of the Dodd-Frank Act.
On July 29, 2011, the SEC modified its upcoming schedule for rulemaking under the Dodd-Frank Act, delaying the implementation of certain executive compensation provisions which had been scheduled to be adopted by the end of 2011. Under the new schedule, the SEC now plans to adopt rules on the following matters between January and June of 2012:
- Disclosure of pay-for-performance and the ratio of the median employee annual total compensation to the CEO's annual total compensation.
- Compensation clawbacks for executive officers of listed companies.
- Disclosure regarding the ability of employees and directors to hedge against losses on their company stock.
- Incentive compensation arrangements for covered financial institutions.
This new timeline makes it unlikely that these planned provisions will be effective during the 2012 proxy season. Rules for certain matters, including exchange listing standards for compensation committee independence and disclosure of compensation consultant conflicts of interest, remain scheduled for adoption by the end of 2011.
To learn more about the executive compensation provisions of the Dodd-Frank Act, see Practice Note, Summary of the Dodd-Frank Act: Executive Compensation.