The Dodd-Frank Wall Street and Consumer Protection Act included multiple provisions relating to executive compensation, including related disclosure, compensation consultants and clawbacks. Many of these new rules are conditioned on the SEC issuing rules to effectuate them.
Recently, the SEC updated its Dodd-Frank rulemaking implementation website to indicate a delay in the planned issuance of the executive compensation rules, with some rules intended to be issued in the first half of 2012 and the others to be issued in the latter half.
Whether the SEC will be able to meet its updated timeline remains to be seen. In the interim, employers should do their best to lay the groundwork for complying with these new rules. For instance, employers should consider adding language to equity grants and other incentive compensation awards acknowledging that the grant or award will be subject to any Dodd-Frank-mandated clawback if necessary.