Alert February 01, 2011

SEC Issues Final “Say on Pay” Rules

The SEC issued final rules (the “Rules”) designed to implement the provisions of the Dodd‑Frank Act that require certain issuers to (1) solicit a shareholder advisory vote on executive compensation at least once every three years, (2) periodically solicit a shareholder advisory vote on the frequency of shareholder advisory votes on executive compensation, and (3) solicit a shareholder advisory vote on so-called “golden parachute” compensation arrangements in connection with mergers or other extraordinary corporate transactions.  Under the Rules, issuers are required to implement the first two of these requirements effective with respect to proxy statements for annual or other meetings occurring on or after January 21, 2011 at which proxies will be solicited for the election of directors.  Issuers are required to implement the advisory vote on golden parachute arrangements in connection with proxy filings made on or after April 25, 2011.  Goodwin Procter will issue a separate Client Alert discussing the Rules in more detail.