On August 2, 2011, the Securities and Exchange Commission (the “SEC”) released a revised Dodd-Frank rulemaking calendar. The new calendar indicates that rulemaking pertaining to the following sections of the Dodd-Frank Act will be delayed until the first half of 2012:
- §§953 and 955: Adopt rules regarding disclosure of pay-for-performance, CEO pay ratios, and hedging by employees and directors.
- §954: Adopt rules regarding recovery of executive compensation (clawbacks); and
- §956: Adopt rules (jointly with others) regarding disclosure of, and prohibitions of certain executive compensation structures and arrangements.
This begs the question whether the SEC will enact rules immediately prior to the beginning of the 2012 proxy season as it did with the “say on pay” advisory vote rules in the 2011 proxy season. While it seems unlikely that all of these items will be applicable in 2012, it is possible that some of these new rules will be effective. Because the SEC must first propose rules and receive public comments on the proposed rules before adopting them, issuers will know in advance which rules might in fact become applicable before drafting their proxy statements. Publicly held companies should carefully monitor the rulemaking progress of the SEC.