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I must admit, I have always loved Thanksgiving. I have so many fond memories of the holiday, like waking up early and smelling Thanksgiving dinner cooking, playing in piles of leaves with my friends as a kid, traveling around town on a crisp Thanksgiving morning to visit local friends, eating two Thanksgiving dinners at my parent’s house and my in-laws’ house (and then being overcome by a “food coma” on a couch somewhere), watching my son play football at Baltimore’s M&T Bank Stadium for his high school Turkey Bowl and watching my dearly departed pug try to steal the Thanksgiving turkey off the table, to name just a few. Thanksgiving is that unique American secular holiday steeped in tradition where, for the most part, we take a moment to stop and appreciate things for just a moment. I can recall only a handful of times where I had to attend to work matters on Thanksgiving, which is a testament to how important the holiday is to all of us.

This has been one heck of year, so getting some downtime to reflect is welcome. A couple weeks ago, I moderated a panel at PLI’s 55th Annual Institute on Securities Regulation titled “The Year in Review: What Just Happened?” During the panel, we delved into several key SEC developments over the course of the last year, as well as the topic of generative AI. That discussion got me thinking that we actually have a number of things to be thankful for tomorrow in the securities and governance world, and here are my top 5:

1. We made it through the first year of pay versus performance disclosure. This time last year, many people were freaking out about the daunting task of calculating and drafting the new pay versus performance disclosure that the SEC required in 2022, and it was indeed a painful process. But now most issuers have that first year under their belt and, with the benefit of some additional Staff interpretations and comments, they can either “rinse and repeat” or make some incremental improvements to the pay versus performance disclosure in upcoming proxy statements. Note that the Staff issued some new and revised Regulation S-K CDIs regarding pay versus performance disclosure yesterday! More on those to come.

2. We are almost at the clawback policy finish line. Next Friday is the deadline for companies to adopt a clawback policy that complies with exchange listing standards, thus bringing to an end over a dozen years of buildup as to what sort of Dodd-Frank Act clawback the SEC and the exchanges would require. Obviously, the SEC ended up deciding to go with the most extreme approach to implementing the Dodd-Frank Act directive, but at least it is over!

3. The share repurchase disclosure requirements are not as bad as they could have been. The share repurchase disclosure requirements that the SEC adopted this past summer did not end up being as bad as what the SEC had proposed, moving from a daily reporting scheme to the quarterly reporting of daily repurchase data. Admittedly, it is still going to be a lot of extra work for no perceivable benefit, but at least we did not end up with something akin to Section 16 reporting for share repurchases. Further, the clock is ticking for the SEC to address the Fifth Circuit’s decision finding fault with the share repurchase disclosure rules, and it remains to be seen how that will all play out.

4. At least we have some rules around cybersecurity disclosure. The SEC’s cybersecurity disclosure rules were pretty much inevitable, but at least we have some concrete rules to work with now rather than regulation by interpretive guidance and enforcement. Next month, the current reporting of material cybersecurity incidents kicks in, and in upcoming Form 10-Ks issuers will be providing the periodic disclosure about cybersecurity risk management, strategy and governance. If you want to utilize your holiday downtime to get a jump on the drafting of that disclosure, be sure to check out our July-August 2023 issue of The Corporate Executive.

5. We made it through another year without mandatory SEC climate disclosure. As originally contemplated in the proposing release for the climate disclosure rules, large accelerated filers would have been gearing up to provide the first phase of mandatory climate disclosure in their Form 10-Ks for 2023, including Scope 1 and 2 GHG emissions data and extensive narrative disclosure about climate risks and governance. As we all know, that did not end up happening, so we remain in a holding pattern as to when final rules will be adopted and what the compliance timetable will look like for those final rules.

As for me, I am going to enjoy the next few days of holiday downtime and I hope you can too. I wish you all a happy Thanksgiving!

– Dave Lynn