As required by federal law, the Office of Information and Regulatory Affairs published the new Spring Regulatory Flexibility Act Agenda on June 30, including a short- and long-term agenda submitted by nearly every federal agency, including the SEC. The second item on the SEC’s Short-Term Agenda – Spring 2020 for the current fiscal year is Listing Standards for Recovery of Erroneously Awarded Compensation. I have posted more than 100 blogs on compensation clawback issues, occasionally speculating that the SEC soon would release proposed or final regulations on Exchange Act Section 10D, as added by Section 954 of the Dodd-Frank Act. Readers will recall that the SEC issued proposed rules on Section 10D and compensation clawbacks way back in July 2015.
It is difficult to predict agency actions in an election year. Some believe that agencies are more likely to issue final rules in an election year, out of fear they might be replaced after the election, while others believe the opposite. In short, nobody knows. Although many of us would welcome the clarity of final rules, I am making no more predictions. But rest assured that if rules are released, we will describe them here and in our panel presentation “Clawbacks: What to Do Now” at the 17th Annual Proxy Disclosure & Executive Compensation Conference on Monday, September 21.
Also on the SEC’s short-term agenda and potentially relevant to executive compensation professionals are:
- Amendments to Rule 701/Form S-8;
- Amendments to Exemptions From the Proxy Rules for Proxy Voting Advice; and
- Modernization and Simplification of Disclosures of Regulation S-K Items 101, 103, and 105.
Relegated to the SEC’s Long-Term Agenda are the final rules on Pay Versus Performance (proposed back in April 2015). So, don’t expect to see them any time soon.
-Mike Melbinger, CompensationStandards.com July 10, 2020
