November 5, 2009

House Financial Services Committee Passes “Investor Protection Act”

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”

We have posted the Course Materials for our two Conferences next week – the set related to each Conference is here: “4th Annual Proxy Disclosure Conference” and “6th Annual Executive Compensation Conference.”

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:

Online Surveys & Market Research

– Broc Romanek