Yesterday, Senator Dodd (D-CT) released a draft of his massive – 1136 pages! – financial services reform bill. Among its numerous provisions, the “Restoring American Financial Stability Act of 2009” contains a half dozen or so provisions aimed at enhancing corporate governance and executive compensation practices. For those of you who aren’t inclined to wade through the bill text, here’s a summary of the bill’s key provisions – and here’s the press release from the Senate Banking Committee. We are posting memos regarding this bill in our “Regulatory Reform” Practice Area.
As noted by Mark Borges last nite in his “Proxy Disclosure Blog,” the executive compensation provisions are:
– Advisory Vote on Executive Compensation (Section 951) – The bill would mandate an annual advisory vote on executive compensation (“Say on Pay”) for companies subject to the SEC’s proxy rules. The vote would apply to all shareholder meetings taking place one year after the bill’s enactment.
– Advisory Vote on Golden Parachutes (Section 952)- The bill would mandate disclosure of and an advisory vote on any compensation arrangements to the CEO that would be payable on a merger or other acquisition transaction that had not been previously been subject to a “Say on Pay” vote. This vote would also go into effect one year after the bill’s enactment.
– Compensation Committee Independence (Section 953) – The bill would require the SEC to direct the national stock exchanges to revise their listing standards to prohibit the listing of any company that did not maintain an independent compensation committee. In addition, the bill would direct the SEC to adopt rules ensuring that any compensation consultant, legal counsel, or other advisor to the compensation committee was “independent” (as defined by the Commission). The bill would ensure that the compensation committee had the authority to retain compensation consultants, legal counsel, and other advisors, require specific disclosure in the proxy statement of whether the committee had retained or received advice from a consultant and whether the consultant’s work raised any conflict of interest and how that conflict was addressed, and ensure that the committee had appropriate funding to retain these advisors. Finally, the SEC would be required to conduct a study on the use of compensation consultants
– Executive Compensation Disclosure (Section 954) – The bill would require the SEC to amend Item 402 of Regulation S-K to require disclosure of information showing the relationship between executive compensation and the company’s financial performance and a pictorial comparison of the amount of executive compensation and the company’s financial performance over the preceding five years. This appears to be an apparent enhancement of the current Performance Graph.
– Clawbacks (Section 955) – The bill would require companies to develop and implement a compensation recovery (“clawback”) policy that would (i) be triggered by a financial restatement, (ii) cover all executive officers, and (iii) require recovery of all incentive-based compensation (including stock options) from the executive officers (both current and former) for the three year period preceding the restatement in excess of what they would have been paid under the restatement.
– Disclosure Regarding Employee Hedging (Section 956) – The bill would require the SEC to promulgate rules requiring proxy statement disclosure of whether a company permits its employees to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset market declines affecting compensatory equity awards.
– Compensation Standards for Holding Companies of Depository Institutions (Section 957) – The bill would require the new Financial Institution Regulatory Agency to establish standards prohibiting compensation plans of a bank holding company that provide executives, employees, director, and principal shareholders with excessive compensation or benefits, or could lead to a material financial loss to the bank holding company.
– Higher Capital Charges (Section 958) – The bill would permit the appropriate federal banking agencies to impose higher capital standards for insured depository institutions with compensation practices that the agency determines pose a risk of harm to the institution.
– Compensation Standards for Holding Companies of Depository Institutions (Section 959) – The bill would require the appropriate federal banking agencies to prohibit a depository institution holding company from paying excessive executive compensation or compensation that could lead to a material financial loss to any institution controlled by the holding company, or to the holding company itself.
– Corporate Governance Provisions – A separate subtitle in the bill (Sections 971-974) would provide for several significant corporate governance changes, requiring:
– disclosure of whether a company has a single CEO/Chairman of the Board or has separated the CEO and Chairman positions;
– the annual election of all directors, thereby eliminating staggered boards;
– majority voting for all uncontested director elections; and
– proxy access for shareholders (with the SEC to promulgate rules governing this access right).
More Details about HealthSouth’s “Proxy Access Reimbursement” Bylaw
Last week, HealthSouth filed its Form 10-Q with the SEC and the company’s amended and restated by-laws are attached as Exhibit 3.3. As I blogged recently, HealthSouth just became the first company to adopt a “proxy access reimbursement” by-law and this new provision is reflected in Section 3.4(c) of the company’s revised by-laws.
Section 3.4(c) is complex and subject to several conditions and limitations. Reimbursement is not required if the Board “determines that any such reimbursement is not in the best interests of the Corporation or would result in a breach of the fiduciary duties of the Board of Directors to the Corporation and its stockholders or that making such a payment would render the Corporation insolvent or cause it to breach a material obligation incurred without reference to the obligations imposed by this Section 3.4(c).”
Reimbursement only applies if: (i) the stockholder’s nominee receives at least 40% of the total votes cast’ and (ii) fewer than 30% of the Directors to be elected are contested. The nominating stockholder (or group of stockholders) can only nominate one person for director at the annual meeting. Where the nominee is not elected, reimbursement is limited to the proportion of total expenses equal to the proportion of favorable votes received; if elected all expenses (as defined in the By-Laws) are reimbursed. There are a number of other conditions. Thanks to Mike Holliday for doing the sleuthing on this!
Check out #5265 in our “Q&A Forum” about whether a Delaware corporation must have a bylaw authorizing payment of proxy expenses. In other words, can Delaware law mandate reimbursement in the absence of a bylaw?
Ideas to Improve the Proxy Plumbing
Ahead of the SEC’s release of a concept release on fixing the proxy plumbing, a few groups have already submitted ideas to the SEC. For example, The Altman Group submitted a proposal to the SEC entitled “Practical Solutions To Improve the Proxy Voting System.” Their proposal focuses mainly on these five fixes:
1. A new methodology called ABO (i.e., All Beneficial Owners) should replace the current NOBO/OBO mechanism which has existed for 25 years, at least with regard to record dates for annual or special meetings.
2. The SEC should seek to authorize the establishment of a second mail and tabulation methodology, one that would give companies the ability (using the names available under ABO) to choose a different vendor to take responsibility for the mailing and tabulation process, while retaining the option to use the current Broadridge system. This new option would be akin to the way most companies currently use their transfer agent to mail and tabulate the votes of registered owners.
3. The SEC should require the NYSE to implement as quickly as possible a robust investor education program to try and ameliorate at least some of the impact resulting from the loss of broker voting on non-contested director elections under Amended NYSE Rule 452.
4. The SEC should amend Rule 13(f) so that information reported by institutions reflects both shares owned and also voting rights after taking into account loans and other transactions that alter such rights. We also suggest shortening the reporting period for 13(f) information to 15 days from 45 days after the end of a calendar quarter and reducing from 20 to 10 business days the pre-notification of a company’s annual meeting record date.
5. The SEC should establish new procedures to deal with issues like “empty voting” and the use of derivative positions to alter voting rights.
On CorpGov.net, Jim McRitchie has posted his analysis of the differences between The Altman Group’s ideas and the positions of the Shareholder Communications Coalition.
Today is the “6th Annual Executive Compensation Conference”; yesterday was the “Tackling Your 2010 Compensation Disclosures: The 4th Annual Proxy Disclosure Conference,” whose archives are already posted. Note you can still register to watch online by using your credit card and getting an ID/pw kicked out automatically to you without having to interface with our Staff (but you can still interface with them if you need to). Both Conferences are paired together; two Conferences for the price of one.
– How to Attend by Video Webcast: If you are registered to attend online, just go to the home page of TheCorporateCounsel.net or CompensationStandards.com to watch it live or by archive. A prominent link called “Enter the Conference Here” on the home pages of those sites will take you directly to today’s Conference.
Remember to use the ID and password that you received for the Conferences (which may not be your normal ID/password for TheCorporateCounsel.net or CompensationStandards.com). If you are experiencing technical problems, follow these webcast troubleshooting tips. Here are the Conference Agendas; times are Pacific.
– How to Earn CLE Online: Please read these FAQs about Earning CLE carefully to see if that is possible for you to earn CLE for watching online – and if so, how to accomplish that. Remember you will first need to input your bar number(s) and that you will need to click on the periodic “prompts” all throughout each Conference to earn credit. Both Conferences will be available for CLE credit in all states except for a few (but hours for each state vary; see the CLE list for each Conference in the FAQs).
– How Directors Can Earn ISS Credit: For those directors attending by video webcast, you should sign-up for ISS director education credit using this form. This is meant only to facilitate providing information to ISS; they are the ones in charge of accreditation and any disputes will need to be taken up with them.
Late yesterday, I uploaded a rare afternoon blog to note Corp Fin Shelley Parratt’s important keynote speech regarding what the SEC Staff expects from 2010 executive compensation disclosures, as well as observations from the ’09 proxy season (eg. still not enough “analysis” in the CD&A). Read that blog for more information.
FASB & IASB Reaffirm Convergence by Mid-2011
As noted by FEI’s “Financial Reporting Blog,” the FASB and IASB have announced the release of a 23-page joint statement which reaffirms their commitment to improve IFRS and U.S. GAAP, and to bring about their convergence through completion of the major convergence projects outlined in the FASB-IASB Memorandum of Understanding by June, 2011. The joint statement outlines plans and milestone targets that will guide completion of the major projects by the June, 2011 target date.
Last week, SEC Commissioner Luis Aguilar delivered this speech entitled “Investors Deserve Sustainable Reform — Not More of the Same” in which he decried some of the Congressional efforts to rein in Sarbanes-Oxley and more. Equally impassioned was Floyd Norris in his column entitled “Goodbye to Reforms of 2002.”
The Coming Hostile Deals
In this DealLawyers.com podcast, Lois Herzeca of Gibson Dunn & Crutcher discusses the expected rise in hostile activity and how to be prepared, including:
– Why is hostile deal activity expected to increase over the next year?
– What interesting examples have occurred recently?
– What should companies be doing strategically to best position themselves?
– What should companies be doing in terms of structural defenses and what should they avoid?
– How should companies address their key investors and shareholder base?
Today, Corp Fin Shelley Parratt delivered this important keynote speech regarding what the SEC Staff expects from 2010 executive compensation disclosures, as well as observations from the ’09 proxy season (eg. still not enough “analysis” in the CD&A). Among other important points that I will cover in this blog later this week, Shelley raised this point regarding how the Staff will administer the comment process in the near future:
It means that after three years of futures comments, we expect companies and their advisors to understand our rules and apply them thoroughly. So, any company that waits until it receives staff comments to comply with the disclosure requirements should be prepared to amend its filings if it does not materially comply with the rules.
Shelley addressed several other crucial points during a Q&A period not covered in her posted speech. The video archive of her keynote should be available in our archived Conference sometime tomorrow for those that want to see that…
Today is the “Tackling Your 2010 Compensation Disclosures: The 4th Annual Proxy Disclosure Conference”; tomorrow is the “6th Annual Executive Compensation Conference.” Note you can still register to watch online by using your credit card and getting an ID/pw kicked out automatically to you without having to interface with our Staff (but you can still interface with them if you need to). Both Conferences are paired together; two Conferences for the price of one.
– How to Attend by Video Webcast: If you are registered to attend online, just go to the home page of TheCorporateCounsel.net or CompensationStandards.com to watch it live or by archive (note that it will take about a day to post the video archives after it’s shown live). A prominent link called “Enter the Conference” on the home pages of those sites will take you directly to today’s Conference.
Remember to use the ID and password that you received for the Conferences (which may not be your normal ID/password for TheCorporateCounsel.net or CompensationStandards.com). If you are experiencing technical problems, follow these webcast troubleshooting tips. Here are the Conference Agendas; times are Pacific.
– How to Earn CLE Online: Please read these FAQs about Earning CLE carefully to see if that is possible for you to earn CLE for watching online – and if so, how to accomplish that. Remember you will first need to input your bar number(s) and that you will need to click on the periodic “prompts” all throughout each Conference to earn credit. Both Conferences will be available for CLE credit in all states except for a few (but hours for each state vary; see the CLE list for each Conference in the FAQs).
– How Directors Can Earn ISS Credit: For those directors attending by video webcast, you should sign-up for ISS director education credit using this form. This is meant only to facilitate providing information to ISS; they are the ones in charge of accreditation and any disputes will need to be taken up with them.
Black & Decker’s CEO Does the Right Thing? Foregoes Change-of-Control Payment
I loved Michelle Leder’s title of her footnoted.org blog recently entitled “On Black and Decker’s CEO and unicorns…“. Michelle was referring to the Form 8-K filed by Black & Decker which reveals that its CEO would forego $20 million in severance, a sum he would be entitled to under his arrangements with the company as triggered by this week’s announced merger with Stanley Tools. The Washington Post ran this article last week noting how this move is perhaps not as generous as it seems.
And here is a response from a member:
I don’t mean to throw stones, but Mr. Archibald is 66 years old. Why is he entitled to three years severance in the first place?
Based on my review of his new three year Executive Chairman Agreement, he is entitled to a base salary of $1.5 million per year, a target bonus of $1.875 million per year and long-term incentives of $6.65 million per year, (of which 50% is in stock options and 50% in restricted stock). Add to that, a 1 million share “sign-on” stock option grant (estimated value $15 million) and a Synergy Bonus Amount of as much as $45 million. All in, he could earn $90 million over the next three years, which would easily make up for his contract waiver if the company performs.
It is also worth noting that his current SERP is worth $35 million as of December 31, 2008, and he retained the right to an enhanced SERP if he is terminated before the end of the new contract term (i.e., he gets additional years of service and his foregone severance is included in the benefit calculation).
While I am glad to see a CEO waiving severance, it looks to me like he is getting it back, and then some.
You may also want to read Paul Hodgson’s “Extraordinary merger bonuses at Pfizer” from The Corporate Library Blog. Also check out this NY Times article from the front page yesterday with a quote from Jesse Brill.
Reminder: Many Companies Need to Amend for Section 162(m) by Year End
Mike Melbinger of Winston & Strawn recently issued this reminder in “Melbinger’s Compensation Blog” on CompensationStandards.com:
Many companies will need to amend their employment agreements, equity plans and awards, and other incentive plans and agreements by December 31, 2009, to preserve the deductibility of performance-based awards and amounts under Code Section 162(m) [the $1 million limit on public companies ability to deduct compensation payments to its named executive officers] in light of Rev. Rul. 2008-13.
Background: Rev. Rul. 2008-13 held that if a plan or agreement provides for payment following an executive’s termination without cause, for good reason, or due to retirement, the plan or agreement does not pay “remuneration payable solely on account of the attainment of one or more performance goals,” as may be required by Code Sec. 162(m) and Treas. Reg. ยง1.162-27(e)(2)(i). Therefore, agreements providing for the accelerated vesting of performance-based cash or equity awards and a payment regardless of actual performance upon retirement, termination of the executive by the company without cause, or termination by the executive for good reason, would cause the awards to fail to satisfy 162(m)’s performance-based exception – even if the accelerated vesting and payout is never triggered. (The IRS first took this position in PLR 200804004.)
The IRS’ rationale for this position was simple: terminations without cause, for good reason, or due to voluntary retirement, are not listed as permissible payment events under the 162(m) regulations. The IRS has also pointed out that, under the sample definitions of “cause” and “good reason” set forth in the ruling, the involuntary termination may arise as a result of the employee’s poor performance and failure to meet the performance goal.
Effective Date Transition Rules: The IRS declared that it would not apply the holdings in the Rev. Rul. to disallow a deduction for any compensation that otherwise satisfies the requirements for qualified performance-based compensation under 162(m) and that is paid under a plan or agreement with payment terms similar to those in the ruling if either:
– The performance period for such compensation begins on or before January 1, 2009 or
– The compensation is paid pursuant to the terms of an employment contract as in effect (without respect to future renewals or extensions, including renewals or extensions that occur automatically absent further action of one or more of the parties to the contract) on February 21, 2008.
Thus, compensation paid for 2009 performance under most agreements and programs was exempt.
For most companies, the 2009 performance period is ending and, therefore, the delayed effective date under Rev. Rul. 2008-13 will not be available much longer. Every company should consider whether it needs to revise its performance-based compensation plans and agreements to comply with Rev. Rul. 2008-13 and, if it must, how to revise the plans and agreements to achieve the original purposes of the acceleration. Remember, Rev. Rul. 2008-13 would deny deductibility to plans and agreements with the offending language even if the acceleration event never occurs.
Mike also was the first one to blog about the IRS starting Section 409A audits about a month ago. Compensation newsletters I’ve seen are only now getting wind of this development…
Following up on the giant insider-trading case a few weeks ago against Raj Rajaratnam and Galleon Management, the SEC brought insider trading charges against 13 more yesterday, including charges against a pair of lawyers for tipping inside information in exchange for kickbacks.
This story was interesting not only for the involvement of Wall Street lawyers (see the WSJ Law Blog for a discussion of how often lawyers are involved in insider trading – answer: it’s rare), but for the colorful nickname of one of the defendants – “the Octopussy” – as well as notable details about the use of disposable cell phones. As noted by this NY Times article, this story has Hollywood potential written all over it – one of the main characters is named “Roomy Khan”! Another is “Deep Shah”!
Enforcement Director Rob Khuzami gave these remarks about how insider trading is a corruption of the basic principle that the markets are fair, including these memorable words:
Goffer would promptly tip the other traders we charge today, at times going to such extraordinary lengths to cover his tracks that he used disposable cell phones.
He gave one of his tippees a disposable cell phone that had two programmed phone numbers labeled “you” and “me.”
After the insider trading was complete, Goffer destroyed the disposable cell phone by removing the SIM card, biting it, and breaking the phone in half.
He threw away half of the phone, and then instructed his tippee to dispose of the other half.
Needless to say, these antics might be appropriate in a James Bond movie.
But they have no place among Wall Street professionals who participate in our capital markets.
The ethical and legal judgments of these defendants were flatly wrong.
They weren’t close calls.
They weren’t nuanced.
They weren’t in gray areas.
As an aside, the SEC’s new Division of Risk, Strategy, and Financial Innovation is getting off the ground by announcing the hiring of three senior people…
US Supreme Court: Oral Arguments for Jones v. Harris
Last month, I blogged about the importance of the US Supreme Court’s Jones v. Harris case since it could impact the fiduciary duties of directors, including this podcast. Oral arguments were held this week and here are some reactions:
Yesterday, as noted in this NY Times article, the House Financial Services Committee passed the “Investor Protection Act” by a vote of 41 to 28. The bill includes an additional $1 billion-plus for the SEC’s budget and the proxy access provision blogged about recently. The Act now moves to the full House to be considered in the coming weeks, with a vote predicted to be held in early December.
The Adler-Garrett amendment – which exempts companies with a market cap of less than $75 million from having to comply with SOX’s internal controls provisions – passed by a vote of 37 to 32. This amendment was supported by White House Chief of Staff Rahm Emanuel – but as the NY Times reports: “The amendment was criticized by senior Democrats, including Representative Barney Frank of Massachusetts, the chairman of the committee. But at a news conference on Tuesday, Mr. Frank defended Mr. Emanuel’s involvement, saying he had helped to negotiate a substantial narrowing of the provision.”
I didn’t watch the Committee in action, but apparently it was a fluid, fast-moving and confusing situation and I have read a number of conflicting reports on what actually was passed. I’ll post the bill as passed when I get my hands on a copy so you can see how it differs from this discussion draft (here is the Committee’s summary of what passed yesterday).
As I understand it, this Miller amendment was passed, which would impact the independence of the FASB by establishing a federal government forum that would overlooking the FASB’s work. I also hear that this amendment from Congressman Perlmutter will also be offered as an amendment to the upcoming legislation, which would create a new risk regulator structure. I blogged about these actions yesterday as well.
Course Materials Now Available: “4th Annual Proxy Disclosure” and “6th Annual Executive Compensation”
Remember you will need your Conference ID and password to access these. Here is other important Conference information that I blogged about earlier this week.
When Will the SEC Adopt New “Proxy Statement Disclosure Enhancement” Rules?
Yesterday, SEC Chair Mary Schapiro delivered a speech at PLI’s annual Securities Law Institute that summarized the current state of proposals that are Corp-Fin related, including identifying the areas that the SEC’s upcoming concept release on proxy plumbing will address. She indicated that the proxy access proposal would be considered by the Commission in early 2010 (which is not new news, as noted in this blog).
But she did not indicate when the proxy disclosure enhancements proposals would be adopted (a set of proposals that includes the proposed executive compensation rules). At this point, it’s clear that these rules will not be adopted on November 9th – as widely rumored for some time – and it’s unknown when they will be adopted or if they would still apply to the upcoming proxy season even though time is running short to modify D&O questionnaires to capture new information. Corp Fin Director Meredith Cross indicated on a panel that these rules might indeed apply to the 2010 proxy season, but as I understand it, her statement wasn’t definitive so anything can happen. [Don’t forget our upcoming webcast: “Ask the Experts: Prepping for a Wild Proxy Season.”]
And even harder for many companies: timing compensation committee meetings (and other board meetings) to deal with any new rules before the year is out. Numerous members have been emailing me asking if – and when – this is gonna happen…
Survey: Will Your Compensation Committee Hold a Special Meeting if the SEC Adopts New Rules?
Here is an anonymous survey to gather information about what companies are doing to prepare for the possibility of new SEC rules that apply to the upcoming proxy season:
Continuing our proxy solicitor podcast series, in this podcast, Rick Grubaugh of D.F. King & Co. provides some insight into issues related to shareholder proposals seeking to allow shareholders the right to call a special meeting – many companies have received passing votes and are faced with tough choices on how to deal with the demand – including:
– What is background of the proposals that seek companies to allow shareholders to call a special meeting?
– What might we expect for the 2010 proxy season regarding this type of proposal?
– What do institutional shareholders believe is the right threshold of share ownership to call a special meeting?
– What options do companies have if they receive a proposal?
Congress Update: The Battle Over SOX’s Internal Control Requirements Intensifies
This morning, the House Financial Services Committee will be voting on Rep. Frank’s “Investor Protection Act of 2009.” According to this WSJ article, the Committee passed an amendment by voice vote yesterday to exempt smaller companies from Section 404 of Sarbanes-Oxley. Rep. Frank reportedly hopes to beat that back today.
This Huffington Post blog notes that the White House is not doing anything to stop the move to soften Section 404 – and in fact, may be supporting it. This Washington Post article notes the same thing.
Meanwhile, FEI’s “Financial Reporting Blog” notes the latest developments regarding Congressional interest in overhauling the accounting area as there are two competing bills being floated. One would overhaul the FASB by creating a Financial Reporting Forum to oversee its activities.
The other would create a new Federal Accounting Oversight Board to do the same – this new Board would also displace the SEC as the ultimate authority and overseer of accounting standards for public companies (a role that the SEC now delegates to the FASB with its oversight). As reported by the Journal of Accountancy, a joint letter from a group normally at odds with each other argues that the SEC should retain its role.
More on “The Mentor Blog”
We continue to post new items daily on our new blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Avoiding Market Misperception of Tax Withholding Transactions
– Survey Results: Use of Enterprise Risk Management (and Disclosure Thereof)
– Analysis: Recent Corp Fin Accounting Comments
– Fifteen Risk Factors for Poor Governance
– How Colleges (and Law Schools) Are Changing
– Test Your Access Now: To ensure you don’t have any technical snafus for the Conferences, please test your access today (this test is only available this week) by using the ID and password that you received for the Conferences.
When you test your access, you can test our CLE Tracker as well as input your bar numbers, etc. You also will be able to input your bar numbers anytime during the days of the Conferences too (remember that you will need to click on the periodic “prompts” all throughout each Conference to earn credit). If you are experiencing problems, follow these webcast troubleshooting tips.
– How to Access the Conference: To access the webcast, use the ID/password that you received in an email from us to get in via a prominent Conference link that will be on the home page of TheCorporateCounsel.net on the day of the Conference; this ID/password is separate and different from any you use for our sites. Note that times posted are in Pacific Time; archives will be available within 24 hours after the live event ends.
– How to Earn CLE Online: Read the “FAQs about Earning CLE” carefully to see if it is possible for you to earn CLE for watching online – and if so, how to accomplish that. Both Conferences will be available for CLE credit in most states (but hours for each state vary; see which state and hours in List: CLE Credits).
– Don’t Share Your ID/Password: We remind you that sharing your ID and password with anyone is stealing from us and a crime.
For those attending in San Francisco:
– Check-In Times: When you come to the San Francisco Hilton – located at 333 O’Farrell Street – you can check in for the Conferences (i.e. pick up your Conference materials, etc.) starting at 7:30 am on Monday, November 9th until the last panel on Tuesday. Continental breakfast is available on Monday from 7:30 to 8:30 am – and on Tuesday from 7:00 to 8:00 am.
– Monday Night Reception: We hope you can join us after the Conference on Monday for our Opening Reception – to be held after the last panel ends – from 6:00 to 8:00 pm. The opening reception will be held in the Exhibit Hall.
You Can Still Attend Via Video Webcast: Due to unprecedented demand and limited space at our conference hotel for the Conferences, we were forced to end Conference Registrations for those attending live in San Francisco. It’s sold out! But note in the alternative, you can still attend by video webcast. You automatically get to attend both Conferences for the price of one: Register now.
As I’ve been covering in this blog over the past week, Congress is moving ahead with its regulatory reform efforts for the markets. Below is a summary of this Sullivan & Cromwell memo:
On October 27, U.S. House Financial Services Committee Chairman Barney Frank released a discussion draft of the Financial Stability Improvement Act of 2009, a legislative proposal for reform of the regulation of the financial services industry. The proposed legislation would, among other things, create a framework for regulation of systemically important financial firms and activities; provide an alternative resolution regime for systemically important financial firms; merge the Office of Thrift Supervision into the Office of the Comptroller of the Currency, retaining the federal thrift charter; reform in several significant respects the regulation of insured depository institutions and their holding companies; and impose certain asset retention requirements on originators and securitizers of asset-backed securities.
More on our “Proxy Season Blog”
With the proxy season now looming in many of our minds, we are posting new items regularly again on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Europe: Shareholders Increasingly Exercise Votes
– Postseason Review: Withhold Votes
– Analysis: Online Annual Reports
– Reminder: “Independence” Ain’t What it Used to Be!
– Will the Sky Fall if Union Representatives Sit on Boards?
– Time Warner Explains Consultant Selection
Below is an excerpt from this Davis Polkmemo that describes key provisions of two competing over-the-counter derivative bills being considered in the House, comparing their similarities and differences:
Two competing bills to reform the over-the-counter derivatives markets are awaiting action by the House of Representatives: a bill to enact the “Over-the-Counter Derivatives Markets Act of 2009” reported by the Financial Services Committee, chaired by Barney Frank, and a bill to enact the “Derivatives Markets Transparency and Accountability Act of 2009” reported by the Agriculture Committee, chaired by Collin Peterson.
Each of the Frank Bill and the Peterson Bill is based on the proposal released by the Obama Administration on August 11, 2009, and since their earlier releases as discussion drafts, they have moved incrementally closer to each other. The bills share many common features, but several important differences remain to be reconciled. It is expected that Chairman Frank and Chairman Peterson will work to reconcile the differences before a bill moves to the House floor.
And here is an interesting article from Harpers entitled “An Object Lesson in Governmental Failure: Derivatives Reform.”
RiskMetrics Opens Its Policy Comment Period
Last week, RiskMetrics opened its policy comment period, providing an opportunity for a range of industry constituents to provide feedback on updates to its proxy voting policies in markets worldwide. Topics covered include takeover defenses in the U.S.; board and director independence in Japan, the U.S., and Europe; compensation and slate ballots in Canada; and equity and share purchase authorities in Europe. The comment period runs through next Wednesday, November 11th.
Sidenote: On Friday, the SEC’s Inspector General released 536 exhibits related to the SEC’s failure to uncover the Bernie Madoff scandal. That’s a lot of paper. Here’s DealBook’s analysis of what the exhibits say…
Also notable is this recent speech from SEC Commissioner Luis Aguilar entitled “The Power of the Shareholder & the Rise of Corporate Democracy.”
Our November Eminders is Posted!
We have posted the November issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!