On June 20, 2012, the SEC published final rules requiring securities exchanges to change their listing standards with respect to compensation committee independence and authority, and requiring additional proxy statement disclosures regarding compensation consultants. Unlike existing audit committee independence requirements, the compensation committee independence factors are not outright prohibitions, but merely factors to be considered by the exchanges when promulgating amended listed standards. The securities exchanges are required to publish proposed amendments to their listing standards no later than September 25, 2012 and final changes no later than June 27, 2013. The new proxy statement disclosure requirements will be effective for annual meetings that are held on or after January 1, 2013.
This Client Alert examines the key aspects of the new rules and practical implementation steps.
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