On August 5, 2015, the SEC approved a rule to implement the Dodd-Frank Act mandate that public companies disclose the ratio of median pay of all employees to the principal executive officer (typically the CEO) total compensation.
A recent Delaware Supreme Court ruling suggests that companies should review their advance notice bylaw provisions and assess whether they are in line with best practices. In Hill International, Inc. v. Opportunity Partners L.P., the company’s disclosure in the prior year’s proxy statement that the next annual meeting would be held “on or about” a given date did not trigger its advance notice bylaw provision.
Not surprisingly, the effectiveness of a company’s ethics and compliance programs depends on leadership.
In the last few years, the SEC has been pursuing most of its enforcement actions through administrative proceedings, rather than filing charges in federal district court. The U.S. Chamber of Commerce recently criticized the practice and called for reform.
The SEC has published a concept release seeking comments on the disclosure requirements for audit committees at listed companies. The SEC seeks information on the effectiveness of disclosures about the audit committees' oversight of independent auditors and whether improvements can be made.
In recent interpretive guidance, the SEC staff confirmed that issuers may solicit investor interest in a Regulation A offering using a word-limited tool like Twitter, provided that the communication links to the more complete statements required by Rule 255.
Effective August 1, 2015, Delaware corporation law will prohibit charter or bylaw provisions that shift company litigation expenses to shareholders who bring and lose a claim against the company and its directors and officers.
On July 1, 2015, the SEC proposed rules requiring public companies to recover executives' incentive-based compensation following an accounting restatement to correct a material error. The proposals are controversial, because they require no misconduct by the executive, have a three-year look back and apply to a broad group of officers.
The 2015 proxy season has seen a significant increase in proposals seeking to give shareholders the ability to nominate directors of U.S. public companies using the company’s ballot. While voting results for proxy access proposals have been mixed, these proposals generally have received unprecedented levels of shareholder support.