The Dodd Frank Act (Dodd Frank Wall Street Reform and Consumer Protection Act) was signed in 2010 as a culmination of efforts to regulate and limit Wall Street as result of the mortgage fallout, says Lifshey, Managing Director at the New York Office of Pearl Meyer & Partners.
Lifshey’s tips came at a recent webinar sponsored by BLR and HR Hero.
Two and one-half years after its signing, major parts of the law are still delayed. In the table below, Lifshey clarifies the status of the main aspects of Dodd-Frank that relate to compensation.
HR budget cuts? Let us help. HR.BLR.com is your one-stop solution for all your HR compliance and training needs. Take a no-cost, no-obligation trial and get a complimentary copy of our special report Critical HR Recordkeeping—From Hiring to Termination. It's yours—no matter what you decide.
Original DFA Scheduled Effective Dates
Shareholder advisory votes:
Say on Pay, Say on Frequency, Say on Golden Parachutes
Shareholders’ rights with respect to advisory votes
Proxy statements for meetings on or after
SEC issued final rules Jan. 25, 2011
Financial Institution Excessive Compensation Rules
Restrict pay with special regulations (only regulate certain financial institutions)
Rules to be issued by 04/21/2011
Proposed rules issued April 2011
Final rules “pending”
final rules still pending
Compensation Committee &
Committee’s Oversight Authority
Has to do with responsibilities for hiring advisors, rules governing advisors’ other relationships with the company or its executive officers
Effective by 07/16/2011
Proposed rules issued March, 2011
Exchanges issued rules in Sept.
2012. SEC to issue final rules by
Disclosure of Compensation Consultant Conflict of Interest
Company needs to talk about whether there is conflict of interest and how comp committee considered independence of consultants
Proxy statements for meetings occurring on or after 07/21/2011
Final rules issued June 20, 2012
If there is a restatement and there were incentive payments, company has to get excess incentive payments back
Has been debated, is confusing, and right now is not required; however, some companies are addressing by saying that the board will look at the issue
Proposed and final rules “pending”
“We still don’t know what it looks like and don’t know what it means.”
However, most companies did put language out showing some link between pay and performance.
Find out what the buzz is all about. Take a no-cost look at HR.BLR.com, solve your top problem, and get a complimentary gift.
Internal Equity Ratio Disclosure
This most ridiculous requirement calculates a ratio between CEO pay and median performance of all other employees. No one has figured out how to calculate or what it means.
Disclosure of Hedging
Execs can’t hedge their company stock, (many companies already have this)
Disclosure of COB/CEO Roles
Requires the company to reveal whether or not is has a separate CEO and Chairman.
If they are the same person, you have to state why you think it’s important to have it this way.
None stated, but it is so similar to 2010 rulethat most companies have complied in the
SEC has not committed to dates for
Batted around by SEC for about 10 years—hard for shareholder to get new director on the slate—court struck it down.
SEC issued final proxy rules August 25, 2010. Courts struck “universal” rule in July 2011. Companies may still submit proposals to change bylaws under Rule 14a-8
Rule 14a-8 currently implemented
In tomorrow’s Advisor, more on Say on Pay, Say on Frequency, and Say on Golden Handcuffs, plus an introduction to the all-HR-in-one website, HR.BLR.com.
If you have comments about this tip and want to post them on this page to share your thoughts with other HR Daily Advisor readers, simply enter your comments below. NOTE: Your name will appear on any comments posted.
Copyright © 2013 BLR Business & Legal Reports Reproduction in whole or in part without permission is prohibited.