March 12, 2010

Dave & Marty on Apache, Proxy Disclosure Trends and Jobs

This just in! In this 20-minute podcast, Dave Lynn and Marty Dunn engage in a lively discussion of the latest developments in securities laws, corporate governance and pop culture, including:

– Analysis of the new shareholder proposal decision in Apache Corporation v. John Chevedden
– What are the proxy disclosure trends under the new rules
– What Marty and Dave would be doing if they weren’t securities lawyers (hint: Marty gets his hands dirty!)

The Senate’s Say-on-Pay Bill: Lots to Chew On

As Senator Dodd races to release his comprehensive financial regulatory reform bill on Monday in the Senate (without Republican support according to this announcement), it is believed that the say-on-pay part of that package has already been unveiled – courtesy of Sen. Robert Menendez, D-NJ – in the form of S. 3049, “The Corporate Executive Accountability Act of 2010.” Senator Menendez, a member of the U.S. Senate Banking Committee, introduced his bill a few weeks ago – and I’ve seen reports that it’s expected to be part of the Democrat’s larger reform package (but it’s possible it could be changed before then of course).

Under the Menendez bill:

– Shareholders at public companies would have a nonbinding vote on the proxy disclosure of compensation packages for the company’s named executive executives
– Shareholders would have a nonbinding vote on the merger proxy disclosure of golden parachute arrangements for the company’s named executive executives
– Investment managers would annually have to disclose how they voted on the two items above
– SEC required to adopt rules eliciting internal pay ratio disclosure from publicly traded companies (ie. disclose the ratio of pay for CEOs compared to the median of all employee’s pay)
– Stock exchanges would required to adopt listing standards giving regulators and investors authority to clawback incentive-based compensation from executives if the company has a restatement due to material noncompliance of the company (the “misconduct” standard would be struck from Sarbanes-Oxley)
– A “senior” executive officer “terminated for cause” (which is defined in this Act) would be barred from receiving a severance package as determined by the company’s board
– Section 16 would be amended to limit executive officers from selling more than certain amounts of vested equity compensation; the bill has a 4-year formula where only 20% could be sold after the first year of vesting, 40% after the second year; 60% after the third and 80% after the fourth)

As noted in this article, one sticking point for the Republicans in a reform bill is proxy access. The prospects for Sen. Dodd’s bill being passed is mixed right now…

Our “Q&A Forum”: The Big 5500!

In our “Q&A Forum,” we have reached query #5500 (although the “real” number is really much higher since many of these have follow-ups). I know this is patting ourselves on the back, but it’s over eight years of sharing expert knowledge and is quite a resource. Combined with the Q&A Forums on our other sites, there have been over 18,000 questions answered.

You are reminded that we welcome your own input into any query you see. And remember there is no need to identify yourself if you are inclined to remain anonymous when you post a reply (or a question). And of course, remember the disclaimer that you need to conduct your own analysis and that any answers don’t contain legal advice.

– Broc Romanek