There is no doubt there are a lot of moving pieces for the upcoming year end SEC reporting cycle. Unfortunately, planning cannot wait until everything comes to rest. The rule proposals are likely to affect not only proxy statements, but Forms 10-K, 10-Q and 8–K as well. We have set forth a checklist below to aid in that process.

Issuers must consider a number of important decisions while rule proposals are pending, and plan for the eventuality that rule proposals might not be finalized. Items to consider at this time include:

  • Whether to include an optional advisory vote on golden parachutes. Our thoughts are until the SEC finalizes the rules any such effort may be fruitless if final rules are different than what is proposed. Longer term, the benefits appear minimal because if disclosure items change, the new items must be put to a vote in the event of a change of control under the SEC’s proposed rules.
  • Issuers should begin to consider what frequency they will recommend to shareholders for the advisory vote on how often a say-on-pay vote should be held.
  • Under the SEC say-on-pay proposal, the next Form 10-K or 10-Q, as applicable, will require disclosure on how frequently the company will include a shareholder vote on the compensation of executives. As a result, a quick decision may need to be made.
  • Issuers will be able to exclude certain shareholder proposals on further advisory votes on executive compensation matters if they adopt a policy that is consistent with the plurality of votes cast in the most recent say-on-pay frequency vote. Thus issuers should consider whether to adopt such a policy.

Click here to see our preliminary checklist.