On Tuesday, the SEC released final rules amending the SEC’s proxy rules to set forth certain requirements for U.S. company’s subject to Section 111(e) of the Emergency Economic Stabilization Act (EESA) of 2008. Section 111(e) of the EESA, as amended Section 7001 of the American Recovery and Reinvestment Act of 2009, requires that TARP Recipients “permit a separate shareholder vote to approve the compensation of executives.” In July, the SEC proposed amendments to the proxy rules to provide guidance for companies seeking to fulfill this mandate. The new rules apply to those entities during the period in which any obligation arising from financial assistance provided under TARP remain outstanding.
The rules were adopted substantially as proposed. However, in response to comments, the SEC amended Rule 14a-6(a) so that TARP recipients required to provide a separate shareholder vote under Section 111(e) will not be required to file a preliminary proxy statement. Additionally, minor modifications to the proposed rules were made with the intent of providing further clarity.