NYSE and NASDAQ Issue FINAL Listing Rule Changes for Compensation Committees and Compensation Advisers
By J. MARK POERIO, STEPHEN H. HARRIS, ELIZABETH A. RAZZANO, & MELINDA A. GORDON
On January 11, 2013, the New York Stock Exchange (NYSE) and The NASDAQ Stock Market LLC (NASDAQ) finalized changes to their listing standards addressing the independence of compensation committees and their advisers. These changes were necessary to comply with the SECs adoption of Rule 10C-1 under the Exchange Act of 1934, and represent another step toward implementing Section 952 of the Dodd-Frank Wall Street Reform and Accountability Act of 2010 (Dodd-Frank). The principal change from the 2012 Proposed Rules is that both exchanges added an exception to the independence assessment requirements for compensation advisers, such that compensation committees are not required to conduct an independence assessment for a compensation adviser that acts in a role limited to activities for which no disclosure is required under Item 407(e)(3)(iii) of Regulation S-K.