For those of us who are unhappy or worse about the outcome of the 2024 presidential election, fearing (among other things) that we are about to enter a modern incarnation of the dark ages, I respectfully suggest that the time has come to light a candle rather than curse the darkness.

The candle is rather limited and simple: whatever else may happen during the next Trump administration, there’s a fair chance that those of us who practice securities law will find the SEC a lot more pleasant (or less unpleasant) to deal with.Continue Reading Lighting a Candle

For many years, I have urged companies to consider going beyond the bare minimum disclosures required by SEC rules – in appropriate circumstances, of course.  In my experience, providing more disclosure than what is specified in the rules can generate positive feedback or even praise from investors and other stakeholders.  And, in fact, many companies

One of the things I learned as young securities lawyer was that securities offerings can be made only by prospectus.  Accordingly, one of the first things we did whenever we embarked on an IPO was to send a memo to our clients reminding them of the limitations imposed on communications under the securities laws and

Once upon a time, few if any investors seriously challenged executive pay.  Executive compensation was, as always, a hot topic, but in the days before say-on-pay votes, it wasn’t easy to effectively object to excessive pay packages.  Moreover, as one of the more outspoken members of the investor community once told me, as long as

Travel on corporate jets is alluring.  I’ve had the pleasure, and it really is a pleasure.  No TSA, nobody squishing you on both sides.  No worry about checked bags not getting there, and so on.  It’s no wonder that people love it so much.

However, there can be too much of a good thing.  My experience

Background

On October 26, 2022, the SEC adopted final clawback rules consistent with the requirements of the Dodd-Frank Act. The new rules direct the national securities exchanges to establish listing standards requiring companies to adopt, disclose, and enforce policies to recoup, or “clawback,” incentive-based compensation erroneously awarded to executive officers.  Based upon recent SEC action, listed companies will have until December 1, 2023 to adopt compliant clawback policies. The following summarizes some key provisions of the final rules and the decisions that companies will have to make as they finalize their policies by the deadline.

Adopting Compliant Policies 

Companies that do not have existing clawback provisions in place must adopt policies that comply with the standards established by the exchanges. Companies that have clawback provisions in place must determine if and how those policies differ from what is required and either modify their existing policies or adopt a new compliant policy on a stand-alone basis. Questions to help integrate or create compliant policies include: Continue Reading The SEC’s New Clawback Rules: The Devil’s in the Details (and There Are Lots of Details)

I recently read an article suggesting that companies need to consider appointing a chief resilience officer. That got me thinking about all the other “chief” positions that pundits may be encouraging companies to create.  Here’s a partial list:

Chief Analytics OfficerChief Happiness Officer
Chief Automation OfficerChief Inclusion Officer
Chief Behavioral OfficerChief Information Officer
Chief

I have long thought that the SEC is among the best, if not the best, government agency.  Over the years, I’ve worked with and gotten to know many folks on the SEC’s staff, who have consistently impressed me as bright, hard-working, serious about the SEC’s mission, and very nice people.  I am sure that most people on the staff continue to possess these and other great attributes.

However.

As with most organizations, the tone at the top is critical.  And, at least from outward appearances, the tone at the top of the SEC is at best dismissive, if not hostile, towards business, and disingenuous.  I’m not saying that the SEC should bow to corporate America’s wishes and do its bidding.  But it’s in the interest of our capital markets and the participants in those markets that the SEC consider a wide range of views and engage in thorough and thoughtful deliberation (part of what is known in the corporate world as the fiduciary duty of due care) before making decisions.

That does not seem to be the case.  In the last year or so, the SEC has repeatedly demonstrated fealty to the institutional investor community by such things as announcing, early in Chair Gensler’s tenure, that the SEC would not enforce rules providing for a more level playing field between companies and proxy advisory firms, adopted by the SEC barely two years earlier, and then formally rescinding those rules (see here).  I’m not saying those rules were perfect – far from it; in fact, they met the classic definition of compromise, in that all sides were dissatisfied with the outcome.  However, they were a start, and instead of getting rid of them the SEC could and, IMHO, should have worked to improve them.
Continue Reading Rooting for the other guys?