On Monday, the SEC issued proposed rules applying the Dodd-Frank Shareholder Say on Pay requirement. More on the specifics later. However, the point that I found most interesting was the SEC's resolution of how frequently the SSOP Vote should be held (all right, so I lead a pathetic life). The SEC's proposed rules provide that issuers must give shareholders four choices: whether the shareholder vote on executive compensation will occur every one, two, or three years, or to abstain from voting on the matter.

The SEC states that it expects that boards of directors will include a recommendation as to how shareholders should vote on the frequency of SSOP votes. However, the SEC cautions that the issuer must make clear in these circumstances that the proxy card provides for four choices (every one, two, or three years, or abstain) and that shareholders are not voting to approve or disapprove the issuer’s recommendation.

Finally, the SEC requests comments as to whether:

  • The four choices available to shareholders for the frequency of shareholder votes on executive compensation be sufficiently clear?
  • Issuers, brokers, transfer agents, and data processing firms be able to accommodate four choices (i.e., one, two, or three years, or abstain) for a single line item on a proxy card?