That was the title of our webinar on March 22 for the American Corporate Counsel, which we will be enhancing and repeating today as part of our Forum for Financial Institution Directors. I have been going light on the blogs lately, since I presume that most readers are, like me, up to their eyeballs in proxy drafting and annual meeting preparation.

Every day directors, executives, compensation professionals, and everyone else wants to know (and asks me) “what will become of…(check all that apply)”

  • The Clawback rules?
  • The CEO Pay Ratio?
  • Proxy Access?
  • The Incentive Compensation Rules for Financial Institutions?
  • Other?

The fact is, of course, that no one knows! However, during our webcasts, my colleague Chris Edwards made an observation, maybe even a prediction, which I would like to pass on. When the SEC is active in regulation and enforcement, the activist community backs off a bit. However, when the SEC and Congress are less active (which most of us agree seems likely for the next couple years), the investor community and particularly the activist investor community steps up its activity. Chris labeled this the Rule of the Yin and Yang.

We already have started to see the Rule of the Yin and Yang being applied. This week, more than 100 institutional investors and advisors signed a letter to acting SEC Chair Piwowar, urging him not to delay the CEO Pay Ratio rule. Shareholder proposals seem to have increased again. For example, at a large telecommunications company, among the six shareholder proposals on the proxy ballot are proposals that the company adopt a hold ‘til retirement requirement for company stock awards and enhance its existing clawback policy (arguing that “a clawback policy limited to ‘financial misconduct’ is too narrow…recoupment is an important remedy for other conduct that does not cause a restatement of financial results, but may harm the company’s reputation and prospects in addition to any financial penalties or loss”).

In summary, those who were worried they would have nothing to do after the Trump Administration’s changes, need not worry.