Dodd-Frank.com

SEC Commissioner Believes Rule 10b-18 should not be Available if Executives are Selling

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SEC Commissioner Robert J. Jackson Jr. recently gave his views on stock buybacks.  Much of the speech focused on Rule 10b-18 which is used by public companies when conducting stock buybacks.  Rule 10b-18 provides a safe harbor from securities-fraud liability if the pricing and timing of buyback-related repurchases meet certain conditions.... Read More

Topics: Executive Compensation, Public Companies and Securities

SEC Issues FAQs on Compensation Plan Proposals Included in Proxy Statements

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The SEC has issued a series of frequently asked questions, which in SEC speak are referred to as Compliance and Disclosures Interpretations (or C&DIs for short), on proxy statements and proxy solicitations.  In general the C&DIs replace previously issued telephone interpretations, but the lead in notes where substantive changes have been... Read More

Topics: Employment, Executive Compensation, Public Companies and Securities

Advocacy Group Requests SEC to Investigate Irregularities in Pay Ratios

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An advocacy group, Public Citizen, has requested the SEC to investigate irregularities and inconsistencies in pay ratios reported by public companies. According to the group’s press release: The letter documents a number of irregularities and inconsistencies in the reported data, highlighting dramatically different reported figures from similar companies in the... Read More

Topics: Executive Compensation, Public Companies and Securities

Fintech Company Subject to SEC Enforcement Action for Exceeding Rule 701 Option Grant Limit

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Subject to its limits, Rule 701 permits non-reporting companies to grant employees equity without registration under the Securities Act of 1933.  One component of Rule 701 requires certain disclosure materials to be delivered to employees if the aggregate sales price or amount of securities sold during any consecutive 12-month period... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities

Initial Tax Disclosures Regarding 162(m) in Proxy Statements

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Many know that the Section 162(m) deduction limit for performance-based compensation has been repealed by the recent tax legislation together with implementation of other changes, effective for taxable years beginning after December 31, 2017, subject to transition relief.  This leaves the question about what to say about Section 162(m) during... Read More

Topics: Employment, Executive Compensation, Public Companies and Securities

Pay Ratio Disclosure Checklist

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Calculating pay ratios for public companies can be a difficult and time-consuming project. While recent interpretative guidance from the Commission  has provided additional flexibility in this process, public companies still need to consider appropriate disclosures regarding pay ratio calculations in addition to the disclosure of the pay ratio.  Our checklist... Read More

Topics: Executive Compensation, Public Companies and Securities

Director Discretionary Compensation Awards Tested by Entire Fairness Standard According to Delaware Supreme Court

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In a recent decision by the Delaware Supreme Court in In re Investors Bancorp Stockholders Litigation, the court found that director equity grants based on director discretion are subject to an entire fairness standard of review irrespective of whether stockholders have previously approved the equity incentive plan. According to the... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities

ISS Seeks Comment on Updated Policies Including Gender Pay Gap

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ISS has made available for public comment certain proposed changes to ISS’ benchmark voting policies for 2018 that could generally become effective for the upcoming proxy season. In the U.S., ISS is proposing three changes: Gender Pay Gap Shareholder Proposals: ISS is proposing specific factors to consider when making a... Read More

Topics: Employment, Executive Compensation, Public Companies and Securities