Attorney Mike Melbinger, author of the Executive Compensation Blog, says he is officially putting away his crystal ball when it comes to predicting (or second guessing) the timing of actions by the Securities and Exchange Commission. Nevertheless, he does point out that select issues are on the SEC’s radar, including specific executive compensation issues, such as the recovery of erroneously awarded compensation.
Mike Melbinger: Final Rules on Compensation Clawback Are High on the SEC’s Regulatory Agenda
As required by federal law, the Office of Information and Regulatory Affairs published the new Spring Regulatory Flexibility Act Agenda on June 30, including a short- and long-term agenda submitted by nearly every federal agency, including the SEC.
The second item on the SEC’s Short-Term Agenda – Spring 2020 for the current fiscal year is Listing Standards for Recovery of Erroneously Awarded Compensation. I have posted more than 100 blogs on compensation clawback issues, occasionally speculating that the SEC soon would release proposed or final regulations on Exchange Act Section 10D, as added by Section 954 of the Dodd-Frank Act. Readers will recall that the SEC issued proposed rules on Section 10D and compensation clawbacks way back in July 2015.
It is difficult to predict agency actions in an election year. Some believe that agencies are more likely to issue final rules in an election year, out of fear they might be replaced after the election, while others believe the opposite. In short, nobody knows. Although many of us would welcome the clarity of final rules, I am making no more predictions.
Also on the short-term agenda and potentially relevant to executive compensation professionals are:
- Amendments to Rule 701/Form S-8;
- Amendments to Exemptions From the Proxy Rules for Proxy Voting Advice; and
- Modernization and Simplification of Disclosures of Regulation S-K Items 101, 103, and 105.
Relegated to the Long-Term Agenda are the final rules on Pay Versus Performance (proposed back in April 2015).
#clawback #compensation #SEC
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.
Securities offered through Lion Street Financial, LLC (LSF) and Valmark Securities, Inc. (VSI), each a member of FINRA and SIPC. Investment advisory services offered through CapAcuity, LLC; Lion Street Advisors, LLC (LSF) and Valmark Advisers, Inc. (VAI), each an SEC registered investment advisor. Please refer to your investment advisory agreement and the Form ADV disclosures provided to you for more information. VAI/VSI, LSF and CapAcuity, LLC. are non-affiliated entities and separate entities from OneDigital and Fulcrum Partners.
Unless otherwise noted, VAI/VSI, LSF are not affiliated, associated, authorized, endorsed by, or in any way officially connected with any other company, agency or government agency identified or referenced in this document.