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Thursday, April 25, 2024 | Back issues
Courthouse News Service Courthouse News Service

Shareholders May Vote on|Executive Compensation

WASHINGTON (CN) - Shareholders will get advisory votes on executive compensation and "golden parachute" packages during corporate annual meetings, under rules proposed by the Securities and Exchange Committee.

The rules would implement shareholder rights provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The votes would be required at least once every six years at meetings where existing agency rules require disclosure of executive compensation packages.

At meetings in which shareholders are asked to approve the mergers or acquisitions or spin-offs of parts of a corporation, they also would be asked to approve any compensation given to employees based on the transaction.

The proposed rules make clear the new votes are strictly advisory and do not alter the fiduciary duties of corporate boards of directors and officers.

In a related action, the SEC proposes to require institutional investment managers to disclose to the agency how they voted proxies relating to executive compensation matters. This change is also mandated by the Dodd-Frank Act.

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