The Securities and Exchange Commission announced on June 24 that at its open meeting on July 1 it will consider three important matters.
The first is whether to propose amendments to its proxy rules that will require public companies that have received financial assistance under the Troubled Asset Relief Program (TARP) to include in their proxy materials an advisory shareholder vote on executive compensation.
Second, the Commission will consider whether to propose rule amendments to “enhance the disclosures that registrants are required to make about compensation and other corporate governance matters, and to clarify certain of the rules governing proxy solicitations”. In a June 10 press release, SEC Chairman Mary Shapiro had announced that the SEC was considering a package of proxy statement disclosure rules regarding (i) how a company and its board manage risks, (ii) a company’s overall approach to compensation, (iii) potential compensation consultant conflicts of interests, and (iv) experience and qualifications of director nominees and the leadership structure. These will presumably be the subject of the rule proposals in this area.
Finally the Commission will consider whether to approve the New York Stock Exchange, Inc.’s proposed change to its Rule 452 to eliminate broker discretionary voting for the election of directors. This proposal has been considered particularly controversial because of concerns voiced, most frequently by smaller public reporting companies with a large proportion of individual holders, as to whether a quorum of shareholders will be achievable absent such broker discretionary voting.
The Commission’s open meeting on July 1 will begin at 10:00 a.m.