Client Alert

SEC Rule Changes for 2010: Be Ready to be Held Accountable

January 14, 2010

J. Mark Poerio, Keith D. Pisani, and Claudia J. Kim

On December 16, 2009, the Securities and Exchange Commission (the SEC) adopted new disclosure rules intended, in the SECs view, to hold corporate directors and officers accountable for their decisions and performance relating to risk management, compensation, and corporate governance. As discussed in detail below, these rules will require additional disclosure in proxy statements or annual reports relating to:

  • the relationship of compensation policies and practices to risk management;

  • valuing stock and option awards revisions to compensation tables;

  • the independence of compensation consultants;

  • the qualifications of board members and board diversity;

  • disclosure of board leadership structure and risk-management oversight; and

  • real-time disclosure of shareholder voting results.

In addition, we have provided a brief update on the state of the SECs proxy access proposal at the end of this alert.

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