TheCorporateCounsel.net

November 8, 2010

It’s Proxy Season: Do We Need to Update Our D&O Questionnaire?

A question you need to ask yourself every year. Here is some input from Richard Blake of Wilson Sonsini:

Once Dodd-Frank rules are finalized and effective, there will be a number of changes to the D&O questionnaires including – but not limited to – compensation committee independence requirements. But for now, the only thing that has been proposed that could affect proxies, and that likely will be effective for this proxy season, are the say-on-pay rules – and note that say-on-pay is mandatory for this proxy season even if the SEC doesn’t finalize its rules (although that’s not the case for say-on-golden parachute).

I think the only thing that could affect D&O questionnaires apart from say-on-pay is the inclusion of new Reg. S-K Item 402(t) – disclosure of “golden parachute compensation” – which would be different and broader than the disclosure in Item 402(j), which is likely already included in the questionnaires. The Item 402(t) disclosure need only be provided if the company wants to take advantage of the SEC rules that say that they don’t need to take a say-on-golden-parachutes-payments vote upon an acquisition event if they previously received a favorable say-on-pay vote that included Item 402(t) disclosure. So sort of a company’s choice as to what it wants to do, particularly since some companies don’t ask about compensation in the questionnaire since they already know what they are paying their executives.

Our Proxy Season Checklists

Like every year, don’t forget that we post a number of checklists from law firms and consulting firms, along with our own, in the “Proxy Season” Practice Area. And don’t forget our sample D&O questionnaires posted in our “D&O Questionnaires” Practice Area.

Gearing Up for Say-on-Pay: What Clients Are Asking Now

Tune in tomorrow for this CompensationStandards.com webcast – “Gearing Up for Say-on-Pay: What Clients Are Asking Now” – featuring Towers Watson’s Eric Larre; Semler Brossy’s Blair Jones, Pay Governance’s Ira Kay, Deloitte Consulting’s Mike Kesner and Verizon’s Mary Lou Weber as they provide guidance about how you can put your best foot forward with shareholders to help gain their approval on the ballot. This is the first of a trio of say-on-pay webcasts on CompensationStandards.com – renew now for 2011 as all memberships expire at year end. Or if you are not yet a member of that site, try a 2011 no-risk trial and gain access to this webcast for free.

– Broc Romanek