Clawback Provisions in the Spotlight

A recent report by compensation advisor Frederic W. Cook indicated that many public companies’ clawback policies to recover executives’ incentive-based compensation following an accounting restatement are not consistent with the SEC’s proposed clawback rule issued earlier this year.  

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New Recommendations for Shareholder Engagement

The Council of Institutional Investors (CII) recently released two publications, one highlighting effective engagement practices between public companies and their investors and another focused on related disclosures. The report on engagement recommends setting appropriate ground rules and provides considerations for timing, topics and participants.  

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New Law Streamlines Disclosure Requirements for Emerging Growth Companies

On December 4, 2015, the transportation bill known as the FAST Act became law. It contains a number of securities law provisions that will benefit emerging growth companies.  

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New Law Codifies Accepted Exemption for Non-Issuer Resales

The FAST Act also amends Section 4 of the Securities Act of 1933 to add new subsection (a)(7), which essentially codifies a generally accepted exemption for private resales of restricted and control securities by persons other than an issuer or a subsidiary. Because the new statutory safe harbor is more clearly defined than the previously-existing resale exemption that had developed through case law and SEC no-action letters (referred to as the 4(a)(1-1/2) exemption), the legislation may facilitate the development of a secondary market for private resales among accredited investors, which would benefit small businesses and their shareholders.  

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The Ticker shares recent developments in SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors.  It is published by Fredrikson & Byron’s Public Companies Group