Topic: Corporate Governance

SEC Proposes Rules On “Pay Versus Performance” Disclosures

April 30, 2015 | Posted by Elizabeth A. Ising; James J. Moloney; Ronald O. Mueller Topic(s): Compensation Committee; Corporate Governance; Dodd Frank; Executive Compensation; Say on Pay

To Our Clients and Friends:

On April 29, 2015, the Securities and Exchange Commission ("SEC" or "Commission") voted, 3-2, to issue proposed rules implementing the pay-versus-performance disclosure requirement in Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). In summary, the proposed rules would require proxy statements or information statements setting forth executive compensation disclosure to include (1) a new compensation table setting forth for each of the five most recently completed fiscal years, the "executive compensation actually paid" (as defined in the proposed rules), total compensation as disclosed in the Summary Compensation Table, total shareholder return (TSR), and peer group TSR, and (2) based on the information set forth in the new table, a clear description of the relationship between executive compensation actually paid to the company’s named executive officers and the company’s TSR, and a comparison of the company’s TSR and the TSR of a peer group chosen by the company.

ISS Issues Guidance on Proxy Access Voting Policy and Other Key Policies

February 19, 2015 | Posted by Ronald O. Mueller; Elizabeth A. Ising; Lori Zyskowski Topic(s): Corporate Governance; Proxy Access

On February 19, 2015, Institutional Shareholder Services (“ISS”) issued FAQs (available here) clarifying its policy on proxy access proposals as well as other key issues, including omission of shareholder proposals from company proxy materials in the absence of no-action relief from the Securities and Exchange Commission (“SEC”) staff, exclusive forum bylaws, and other bylaw amendments adopted without shareholder approval. 1. Proxy Access. Under the approach announced in the FAQs, ISS generally will support both shareholder and company proposals that provide for proxy access with the following features:

SEC Ceases To Issue No-Action Letters on Conflicting Shareholder Proposals

January 16, 2015 | Posted by Elizabeth A. Ising; Ronald O. Mueller; Lori Zyskowski Topic(s): Corporate Governance; Proxy Access

Today the Securities and Exchange Commission (“SEC”) staff announced that it will no longer express views on the application of Rule 14a-8(i)(9), one of the bases for excluding shareholder proposals from company proxy materials, during the current proxy season. The staff’s announcement is a result of today’s announcement by SEC Chair Mary Jo White that she has directed the staff of Division of Corporation Finance to review the rule and report to the Commission on its review.

ISS TO LAUNCH NEW “QUICKSCORE 3.0”

October 28, 2014 | Posted by Elizabeth A. Ising Topic(s): Corporate Governance

Last week, proxy advisory firm Institutional Shareholder Services Inc. (“ISS”) released information about the updated version of its corporate governance benchmarking tool, ISS Governance QuickScore 3.0 (“QuickScore 3.0”), which will launch on November 24, 2014. Companies should take certain actions now and in early November to prepare for the launch of new QuickScore 3.0, as discussed below. QuickScore 3.0 includes both new data points and updates to existing data points for U.S. companies. ISS is expected to release the details of these changes later this week, but below is a summary of the changes we have been able to determine based on the preliminary information released by ISS.

SEC Approves PCAOB’s New And Amended Standards On Related Party Transactions And Significant Unusual Transactions

October 24, 2014 | Posted by Michael Scanlon Topic(s): Audit Committee; Compensation Committee; Corporate Governance; Securities Regulation

Earlier this week the SEC approved, without amendment, the PCAOB’s new auditing standards that expand audit procedures required to be performed with respect to three important areas: (1) related party transactions; (2) significant unusual transactions; and (3) a company’s financial relationships and transactions with its executive officers (including executive compensation). The standards also expand the required communications that an auditor must make to the audit committee related to these three areas and amend the standard governing management representations that the auditor is required to periodically obtain. See SEC Release No. 34-73396, Order Granting Approval of PCAOB’s Proposed Rules on Auditing Standard No. 18, Related Parties, Amendments to Certain PCAOB Auditing Standards Regarding Significant Unusual Transactions (October 21, 2014), available at http://www.sec.gov/rules/pcaob.shtml.

ISS Announces Proposed Changes to Proxy Voting Policy on Independent Chair Shareholder Proposals Voted on at 2015 Shareholder Meetings

October 15, 2014 | Posted by Elizabeth A. Ising; Ronald O. Mueller Topic(s): Corporate Governance

Today, the proxy advisory firm Institutional Shareholder Services Inc. (“ISS”) announced proposed changes to its voting policy on independent chair shareholder proposals and opened the comment period until October 29, 2014, to solicit feedback on the changes. This is one of two significant proposals ISS announced today that would impact U.S. companies for the 2015 proxy season.

ISS Provides Additional Information on New Proxy Voting “Scorecard” Approach for Evaluating Equity Compensation Plan Proposals at 2015 Shareholder Meetings

October 15, 2014 | Posted by Elizabeth A. Ising; Ronald O. Mueller Topic(s): Compensation Committee; Corporate Governance

Today, proxy advisory firm Institutional Shareholder Services Inc. (“ISS”) provided additional information on its plans to implement a new “scorecard” approach to evaluating equity compensation plan proposals at U.S. shareholder meetings and requested comments on its proposed policy change. This is one of two significant proposals ISS announced today that would impact U.S. companies for the 2015 proxy season, with the other proposed policy change relating to voting recommendations on independent chair proposals (which we discuss here). Companies considering seeking shareholder approval of equity plans at shareholder meetings in 2015 should consider these proposed changes now to the extent they want ISS to recommend votes “For” the equity plan.

ISS Releases Survey for 2015 Policy Updates

July 17, 2014 | Posted by Elizabeth A. Ising; Ronald O. Mueller Topic(s): Audit Committee; Compensation Committee; Corporate Governance; Executive Compensation; Say on Pay

Institutional Shareholder Services Inc. (“ISS”), the most influential proxy advisory firm, today launched its 10^th annual global policy survey. Each year, ISS solicits comments in connection with its review of its proxy voting policies. At the end of this process, in November 2014, ISS will announce its updated proxy voting policies applicable to 2015 shareholders’ meetings.

House Financial Services Committee Approves Eight Bills Affecting Securities Regulation

July 16, 2014 | Posted by James J. Moloney Topic(s): Corporate Governance; Dodd Frank; Investment Act/Investment Advisors Act; JOBS Act; Miscellaneous; Securities Regulation

Earlier this summer, on May 22, 2014, the Financial Services Committee of the House of Representatives approved eight bills relating to issuer disclosures, public and private capital raising, the liquidity of restricted securities and SEC regulations generally. These bills, if enacted into law, would incrementally ease the many burdens imposed by the current securities regulatory regime.

SEC Issues Guidance on the Use of Social Media and the Intrastate Offering Exemption

June 11, 2014 | Posted by James J. Moloney; Andrew L. Fabens Topic(s): Corporate Governance; Securities Regulation

Solicitations using Social Media

During a webcast earlier this year, our partner Jim Moloney, who formerly worked in the SEC’s Office of Mergers & Acquisitions (“OM&A”), spoke with the current Chief of OM&A, Michele Anderson. On that webcast, Ms. Anderson acknowledged that “social media is here to stay,” noting that the Commission was “trying to find a way to make it work.” Following the webcast, the SEC’s Division of Corporation Finance (“Corp Fin”) posted a new round of Securities Act Compliance and Disclosure Interpretations (“C&DIs”) that approved hyperlinking to legends or required statements in satisfaction of the requirements of Rules 134, 165 and 433 in certain situations. Under three new interpretations, Corp Fin clarified that an electronic communication containing a hyperlink to a legend (or a required statement in the Rule 134 context) would be acceptable so long as: