1. The Dodd-Frank Act turns one year old on July 21! Deftly maneuvering ahead of the slew of retrospectives we anticipate on July 22, a review of what the SEC has accomplished under the Act so far is here. The biggies, at least in the governance world, are:
  • Final say-on-pay rules, here. As noted in last month’s ICYMI (see also here), say-on-pay litigation quickly followed, including an action filed last month in New York against BNY Mellon in which the plaintiffs did not let shareholder approval of pay practices stand in the way of their fiduciary breach claims.
  • Final whistleblower bounty rules, here. The Internet teems with secondary resources about whistleblower systems and the SEC’s bounty program. A recent suggestion of "what corporate managers should know about the SEC whistleblower rules" is here.

Proposed rules covering a slew of other governance and disclosure items under Dodd-Frank, now slated for adoption in the second half of 2011, include:

  • compensation committee and adviser independence rules;
  • conflict minerals, mine safety and resource extraction disclosures;
  • pay for performance disclosure;
  • pay disparity disclosure (but see a possible correction of this one, here);
  • compensation clawbacks; and
  • director and employee hedging disclosure.

Don’t be surprised if adoption of some of the proposed rules slips further, as has been the trend under the ambitious rule-making agenda imposed by Dodd-Frank. See page 11 of the progress report here.

  1. Keep in mind that the D.C. Court of Appeals may, any day now, issue a ruling on shareholder access to a public company’s proxy statement, either clearing the decks for implementation or sending the SEC back to the drawing board yet again. For the last we heard on the issue, and a suggestion that business groups may have the upper hand in the case, see here, here and here.
  2. The SEC updated its Financial Reporting Manual, its playbook for accounting review of public filings, here. The SEC added a helpful "summary of changes" section to the manual.
  3. The SEC adopted and changed a few Compliance and Disclosure Interpretations, including some about compensation-related items. A description of the changes is here.
  4. The SEC staff also recently published observations, here, on common problems with XBRL implementation.
  5. The IRS proposed "clarifying" §162(m) regulations, here, that emphasize that (a) an incentive plan must specify maximum individual awards and (b) the transitional relief for private companies that go public does not apply to restricted stock units, phantom stock or other equity-based compensation except "stock options, stock appreciation rights, and restricted property." Recall, generally, that regulations under §162(m) allow exclusion of "performance-based compensation" from the $1 million cap on compensation tax deductibility for publicly traded companies and that transition rules provide that §162(m) does not apply to compensation paid pursuant to a plan or agreement that existed while the company was private.
  6. The PCAOB released a concept release on the possible revisions to standards for reports on audited financial statements, here, and announced a public roundtable on the topic to occur sometime later in 2011.
  7. The FTC and DOJ jointly published changes to the Hart-Scott-Rodino premerger notification form, generally expanding the information required to be provided. The final rule is here and the new notification form is here.
  8. ISS posted its 2011-2012 policy survey, here. This is your chance to influence ISS voting guidelines, at least until access to the survey ends on August 3.
  9. Finally, the NYSE released an Information Memo earlier this month, here, the subject of which is proper conduct at the NYSE, including on the trading floor. The list of prohibited activities makes the NYSE trading floor seem like a super fun place, at least before distribution of the memo, which prohibits "roughhousing", "use of air horns", "practical jokes", "smoking", "running," "consumption of alcoholic beverages" and "possession of firearms, illegal weapons and fireworks." It is encouraging to note NYSE policies also strictly prohibit gambling, including "organized for-profit betting activity relating . . . to outside events." Uh, wait . . . .