Regulatory: Say on Pay Hits Corporate Boardrooms

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in July 2010, requires public companies to include in their 2011 proxy statements a non-binding shareholder vote on the compensation of their top executive officers. Dodd-Frank also requires public companies to conduct a separate shareholder vote on the future frequency of the say-on-pay vote (every one, two or three years), known as "say-when-on-pay."

While the U.S. Securities and Exchange Commission's (SEC) rulemaking schedule to implement Dodd-Frank has already been delayed several times, the new say-on-pay rules represent the major regulatory change for corporate boards and general counsel this proxy season. The SEC proposed rules to implement these requirements on Oct. 18, 2010 and the final rules were adopted on Jan. 25, 2011.

Gardner Davis

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