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SEC Extends Review Period for Nasdaq’s Board Diversity Proposal

On the heels of our post of our summary deck yesterday on Nasdaq’s December 2020 Board Diversity Proposal, the SEC announced last night that it needs more time to consider Nasdaq’s proposal and associated comment letters.  With the extension, the SEC has until March 11, 2021 to either approve or disapprove the proposal, or institute proceedings to aid its determination.  
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Nasdaq’s Board Diversity Proposal

The SEC continues to consider and take public comment on Nasdaq’s December 2020 Board Diversity Proposal. That proposal, if approved as written, would require Nasdaq-listed issuers to disclose their board diversity composition annually and eventually have two “diverse” directors on their boards, or explain why not. Limited exceptions would also apply.

There’s been much speculation as to whether the SEC will approve these proposed amendments to Nasdaq’s listing requirements, decline to do so, or propose, at some point in time, its own board diversity disclosure requirements.
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SEC Approves NASDAQ Rules to Report Third-Party Director Compensation

On Friday, the SEC approved NASDAQ rules that require its listed companies to publicly disclose compensation or other payments by third parties to board members or nominees.

NASDAQ made two amendments to the original rule proposal. We previously discussed the first amendment here. On June 30, 2016, NASDAQ filed a second amendment to the proposal, which replaced the proposal in its entirety and contains the version of the rules that the SEC approved.
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IPO Governance Practices: A Davis Polk Survey

As public company governance remains in the spotlight, we examined the governance structures of the 50 largest U.S. newly public companies at the time of their initial offerings.  Our survey of both controlled and non-controlled companies found that those companies continue to adopt various takeover defenses at the time they enter the public market, a stark contrast to the current practices of the S&P 500.
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NASDAQ Amends Rule Filing on Disclosure of Third-Party Compensation for Directors and SEC Extends Review Period

The SEC has extended to July 4, 2016, as the deadline for taking action on NASDAQ’s proposal requiring its listed companies to disclose any third-party compensation payments related to candidacy or service as directors on the companies’ boards.

We previously discussed the rule proposal here. Last week NASDAQ amended the rule filing so that the disclosure must be made in the proxy statement for any shareholder meeting that elects directors, not just at annual meetings.
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Nasdaq and NYSE Reminders on Material News Announcements, Including Changes to the Dates of Earnings Announcements

Both Nasdaq and the NYSE issued recent reminders to companies about key announcements that may constitute material news.

Changes to dates.  Changes to a company’s earnings release, dividend record and dividend payment dates may be material information that should be promptly disclosed publicly, Nasdaq noted recently in an issuer alert.  This includes any changes to these dates, such as when earnings are announced. 
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NASDAQ Compensation Committee Certification Now Available Online

NASDAQ has announced to its issuers that the compensation committee certification that it requires has been added to its list of online forms under the NASDAQ OMX Listing Center. NASDAQ companies must use this form to certify compliance with the amended compensation committee listing rules no later than 30 calendar days after the Company’s first annual meeting occurring after January 15, 2014, or October 31, 2014, whichever is earlier. 
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Focusing on Compensation Committee Charters Part II – for Nasdaq Companies Only

We previously discussed the requirements for NYSE companies here. Today, Cindy Akard talks about the required changes to committee charters for Nasdaq companies.

Are any charter amendments required by July 1?
No. Compensation committees have additional responsibilities by July 1 related to compensation committee advisers, but they can reflect these in a committee charter, committee resolution or other board action.
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Nasdaq’s Internal Audit Proposal Criticized

Perhaps owing to more controversy than expected, the SEC has filed a notice to solicit additional comments on Nasdaq’s proposal to require that listed companies establish and maintain an internal audit function. The Commission had until April 22 to approve or disapprove the proposal, but has delayed that decision until June 6 in order to consider the 38 comments that were received and seek more comments.
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