Though most reporting companies conducted their first say-on-pay vote in 2011 and disclosed the shareholder voting results on Form 8-K, some companies overlooked the additional requirement to disclose the board of directors’ decision (in light of the shareholders’ advisory vote) regarding the frequency that the company will conduct say-on-pay votes. A company’s failure to file this Form 8-K regarding the board’s decision on the s say-on-pay vote frequency could result in the company being an untimely filer and ineligible to use Form S-3. Fortunately, the SEC staff indicated in its 2012 “SEC Speaks” conference that it will likely grant waivers to companies if:

  1. they file an amended Form 8-K indicating the board’s decision on the say-on-pay vote frequency; and
  2. the board’s decision on say-on-pay vote frequency followed the shareholder’s recommendation.

However, anecdotal conversations with the SEC staff have indicated that:

  • waivers are not always granted;
  • the board’s decision on say-on-pay vote frequency must match the board’s recommendation in addition to matching the shareholder’s recommendation for a waiver to be granted; and
  • the SEC does not intend to grant waivers forever.

 Back in 2011, the Securities and Exchange Commission (SEC) issued final rules pursuant to Section 951 of the Dodd-Frank Act requiring reporting companies to, among other things:

  • conduct shareholder advisory votes at least once every three years regarding approval of executive compensation (say-on-pay vote);
  • conduct shareholder advisory votes at least once every six years regarding the frequency at which the company will conduct say-on-pay votes (say-on-frequency vote);
  • disclose on Form 8-K the results of the say-on-pay vote and the say-on-frequency vote; and
  • disclose on Form 8-K the company’s decision regarding the frequency at which it will conduct a say-on-pay vote.

Back in 2011, the Securities and Exchange Commission (SEC) issued final rules pursuant to Section 951 of the Dodd-Frank Act requiring reporting companies to, among other things:

  • conduct shareholder advisory votes at least once every three years regarding approval of executive compensation (say-on-pay vote);
  • conduct shareholder advisory votes at least once every six years regarding the frequency at which the company will conduct say-on-pay votes (say-on-frequency vote);
  • disclose on Form 8-K the results of the say-on-pay vote and the say-on-frequency vote; and
  • disclose on Form 8-K the company’s decision regarding the frequency at which it will conduct a say-on-pay vote.

Even if the company decided to adopt the shareholders’ recommendation with respect to say-on-pay vote frequency, the company must still file a Form 8-K disclosing its decision. Item 5.07(d) of Form 8-K requires that this filing be made by the earlier of:

  • 150 calendar days following the shareholder vote with respect to say-on-pay vote frequency; or
  • 60 days prior to the deadline to submit shareholder proposals for the company’s next annual meeting or other meeting relating to the election of directors.

Action Items

  1. If you have already filed a Form 8-K disclosing the company’s decision with respect to say-on-pay vote frequency, then no action is required.
  2. If you are unsure whether you filed a Form 8-K disclosing the company’s decision with respect to say-on-pay vote frequency, then you should review your SEC filings closely to determine whether you have made this filing.
  3. If you have not filed a Form 8-K disclosing the company’s decision with respect to say-on-pay vote frequency and the company decided to adopt the recommendation of the board and the shareholders, then you should file an amendment to the Form 8-K in which you disclosed the shareholder voting results regarding say-on-pay vote frequency and state in the amendment the frequency of say-on-pay votes that the company adopted (and that it was consistent with the shareholder vote). If you have securities registered on Form S-3 or if you intend to register securities on Form S-3 in the near future, you should contact your securities counsel to assist you in seeking a waiver from the SEC staff.
  4. If you have not filed a Form 8-K disclosing the company’s decision with respect to say-on-pay vote frequency but the company did not adopt the board’s recommendation and the shareholders’ recommendation, then your company may be considered an untimely filer that would not be eligible to use Form S-3. You should contact your securities counsel to determine your best course of action.