Alert May 03, 2011

SEC Extends Comment Period on Rule Proposal that Would Require Exchanges to Establish Listing Standards Relating to Compensation Committees and Compensation Consultants

The SEC extended until May 19, 2011 the deadline for submitting comments on its rule proposal that would direct the national securities exchanges and national securities associations to prohibit the listing of any equity security of an issuer that is not in compliance with the requirements of new Section 10C to the Securities Exchange Act of 1934 Act added by the Dodd-Frank Act.  In broad terms, the proposal would direct national securities exchanges to establish listing standards that impose independence standards on a compensation committee’s members and on its compensation advisers and that require a compensation committee to have the authority to engage, oversee and compensate compensation advisers.  The Proposal would also revise the disclosure requirements for proxy materials relating to the election of directors at an annual meeting to include additional disclosures regarding a compensation committee’s use of a compensation consultant.  See the April 5, 2011 Alert for more details on the SEC’s rule proposal.