June 11, 2013

Survey Results: Rule 10b5-1 Plan Practices

We have posted these survey results on Rule 10b5-1 plan practices:

1. Does your company require insiders to sell shares only pursuant to a Rule 10b5-1 trading plan?
– Yes, insiders are required to use Rule 10b5-1 plans in order to sell shares – 0%
– No, but they are strongly encouraged – 31%
– No, and they are not explicitly encouraged – 69%
– Not sure, it hasn’t come up – 0%

2. Does your company review and approve each insider’s Rule 10b5-1 trading plan?
– Yes, it is subject to prior review and approval by the company pursuant to the insider trading policy – 91%
n=2 (5.88%) Yes, but only the template plan is reviewed and not the actual trading schedule – 6%
– No, but we have a broker that we require to be used and have reviewed that brokers template – 0%
– No, and there is no requirement to go through a specific broker – 3%

3. Does your company allow sales of shares through Rule 10b5-1 trading plans during blackout periods?
– Yes – 91%
– No – 3%
– Not sure, it hasn’t come up – 6%

4. Does your company require a waiting period between execution of Rule 10b5-1 trading plans and time of first sale?
– Yes, it is a two week waiting period or less – 15%
– Yes, it is a one month waiting period (or close to it) – 44%
– Yes, it is a two month waiting period (or close to it) – 12%
– Yes, it is a waiting period until the next open window – 12%
– No – 18%
– Not sure, it hasn’t come up – 0%

5. Does your company allow insiders to voluntarily terminate a Rule 10b5-1 plan?
– Yes – 82%
– No, only terminations dictated by the trading plan are allowed – 18%

6. Does your company make public disclosure of the insiders’ Rule 10b5-1 trading plans?
– Yes, but only for directors and/or one or more officers – 15%
– Yes, for all directors and employees – 6%
– No – 79%

7. If your company makes public disclosure, how does it do it?
– Form 8-K – 50%
– Press release – 8%
– Website posting – 8%
– Combination of above – 8%
– Other – 25%

Please take a moment to participate in this “Quick Survey on Loan Prohibitions & Cashless Exercises” and “Quick Survey on Lead Directors.”

Relief Granted! Treasury Subsidiaries of Non-Financial Companies

Recently, I blogged about the dire need for relief from the CFTC over an unintended consequence of Dodd-Frank. Good news! In this no-action letter, the CFTC Staff granted that relief (learn more in this Davis Polk memo)…

Webcast: “Proxy Season Post-Mortem: The Latest Compensation Disclosures”

Tune in tomorrow for the webcast – “Proxy Season Post-Mortem: The Latest Compensation Disclosures” – to hear Mark Borges of Compensia, Dave Lynn of and Morrison & Foerster and Ron Mueller of Gibson Dunn analyze what was (and what was not) disclosed this proxy season.

– Broc Romanek