The Securities and Exchange Commission (SEC) has recently revised its rulemaking schedule for the proposal and adoption of several of the rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). In particular, the SEC now expects to propose rules relating to disclosure of pay-for-performance, pay ratios and hedging by employees and directors (Dodd-Frank Sections 953 and 955) and "clawbacks" of executive compensation (Dodd-Frank Section 954) between August and December 2011. The SEC plans to adopt final rules on these items, as well as adopting joint rules with other federal regulators relating to disclosure and prohibitions of certain executive compensation structures and arrangements by financial institutions (Dodd-Frank Section 956), between January and June 2012.

This delay calls into question whether these rules will be in effect for the 2012 proxy season. In particular, companies would likely appreciate the extra time to determine how best to calculate the pay ratio (the ratio of the total annual compensation of the CEO in comparison to the median annual total compensation of all other employees), which is one of the more controversial Dodd-Frank provisions. Calculating the median annual total compensation of employees is expected to be an onerous task resulting in significant time and expense, not to mention accuracy concerns, particularly for international companies addressing foreign exchange rates and whether statutorily prescribed benefits in other countries should be treated as perquisites under the US securities regime. Companies that subcontract and use a large number of consultants, such as government contracting firms, will also need to evaluate carefully if these individuals should be included in the calculations.

The final rules relating to exchange listing standards regarding compensation committee independence and factors affecting compensation adviser independence and relating to disclosure of compensation consultant conflicts (Dodd-Frank Section 952), which were proposed in April 2011, are still scheduled for adoption between August and December of 2011.