Jenner & Block

Client Alert: Independents’ Day: The SEC Approves Final Rules Regarding Compensation Committees

On June 20, 2012, the Securities and Exchange Commission issued final rules affecting compensation committee independence and disclosure of compensation consultant conflicts under Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.  The final rules (i) adopt new Rule 10C-1 requiring the national securities exchanges to establish listing standards regarding the independence of compensation committee members and the retention of compensation advisers and (ii) amend Item 407 of Regulation S-K to expand disclosure regarding compensation consultants’ conflicts of interest.  New Rule 10C-1 requires companies to comply with new disclosures in their proxy statements for annual meetings at which directors will be elected on or after January 1, 2013.  This client alert highlights the new developments from Rule 10C-1.