SEC adopts compensation, corporate governance and risk disclosure changes
18 December 2009
The SEC has adopted new rules mandating increased disclosure about a public company's compensation, corporate governance and risk policies and practices.
The new rules have an effective date of February 28, 2010, with changes to the compensation tables applying for fiscal years ending on or after December 20, 2009.1
The new rules require enhanced disclosure in the following areas:
- Compensation policies and practices for all employees as they relate to risk management practices and risk-taking incentives
- Qualifications and experience of directors and director nominees, involvement in legal proceedings and other directorships held by the directors
- How diversity is considered in the director nomination process
- The board's leadership structure and the board's role in the oversight of risk and
- Services provided to the company by compensation consultants.
In addition, the new rules will require:
- The summary compensation table and the director compensation table to include the aggregate grant date fair value of stock and option awards and
- Prompt reporting of shareholder voting results on Form 8-K.
To see the SEC rules, go to http://sec.gov/rules/final/2009/33-9089.pdf