December 11, 2003

Yikes! Nasdaq Flips Back to

This one is a moving target. I hear from a reader that the Nasdaq staff is now going back to its original position that proxy statement disclosure in proxy statements sent to stockholders for annual meetings held on – or after – January 15th should include the newly adopted disclosure from the new governance standards.

So we are back to a split in opinion between the NYSE and Nasdaq – as we noted in our December issue of E-Minders. The maddening part is that nothing in writing has come from the Nasdaq staff on this very important topic – and its not the type of topic for which one should submit an interpretive request and pay the Nasdaq staff $2k (as now required under Rule 4550). As an aside, did you notice that Nasdaq has advertising at the bottom of its “Legal & Compliance” page? Sorta diminishes the feeling that you are dealing with a regulator…

Don’t forget today’s webcast on “The New Governance Listing Standards” during which inhouse counsel will discuss how they are implementing the new standards (and not rehashing what those new standards are).

New Executive Compensation Guidance

Today, the National Association of Corporate Directors is coming out with a Blue Ribbon Commission Report on Executive Compensation and the Role of the Compensation Committee. As evident from how often I cite the NACD “BRCs” in the FAQs on, I hold them in high regard as they are among the finest corporate governance publications out there.

Based on an article in today’s WSJ, this BRC proposes ways to constrain exec pay, including recommending that comp committees hire their own comp consultants and that committees should hire consultants not used by management for other assignments (as well as that companies should provide disclosure if the committees do hire someone that does work for management). Other ideas are crackdowns on severance pay; “pay-for-performance” packages that are triggered after-the-fact; and incentive pay for weak performance.

Perhaps the most interesting is the advice to consider alternatives to CEO contracts. I will blog more after I get a chance to obtain and read this new BRC.