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Nasdaq Files Amendment to Proposal Governing Compensation Committees

Nasdaq has filed an amendment to its proposed listing standards with respect to compensation committees, as referred to in our recent post. The key provisions include:

  • Effective Dates.  Changing the date of effectiveness to July 1, 2013, rather than immediate effectiveness upon SEC approval, for when compensation committees must have the specific responsibilities for considering the independence of advisers and the authority necessary relating to the retention and oversight of those advisers. The effective dates of the provisions as to the compensation committee independence standards continue to be companies’ first annual meetings after January 15, 2014 or October 31, 2014.

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Commentators Raise Concerns with the SEC About Proposed Listing Standards for Compensation Committees

Most of the 15 comment letters on the proposed listing standards for compensation committees by the NYSE and Nasdaq focused on committee member independence. Some commentators, including AFSCME and Teamsters, argued that the standards do not go far enough and should include additional specified factors with respect to personal and business relationships between compensation committee members and senior management, directors fees and disclosed related party transactions. They also objected to Nasdaq’s proposal to retain the allowance for exceptional circumstances according to which a board may have a non-independent director serve on the compensation committee for up to two years. 

Two commentators, including the Society of Corporate Secretaries and Governance Professionals, questioned Nasdaq’s prohibition on the acceptance of consulting or other fees for determining compensation committee independence.
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NYSE Webcast Panel Previews the 2013 Proxy Season 

Last week I participated in an NYSE-sponsored webcast hosted by Judy McLevey at the NYSE. Our panel discussed the issues that may affect the upcoming proxy season. The other panelists consisted of a group of recognized experts including Carol Bowie from ISS, Andrew Letts from State Street, Jim Parsons from Exxon Mobil, and Darla Stuckey from the Society of Corporate Secretaries and Governance Professionals.  An archive of the webcast is available here.  

Some of the main points reviewed included:  

New Policies and Investors’ Use of Proxy Advisory Firms.  Carol described the major parts of the new ISS policy updates and Darla discussed Glass Lewis changes. 
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