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Forum Report
Immediate Requirement of 300+ “Say on
Pay” Resolutions
The SEC updated its
Compliance and Disclosure Interpretations today relating to Section 7001
of the American Recovery and Reinvestment Act of 2009, which requires a few
hundred TARP recipients to “permit a separate shareholder vote to approve
the compensation of executives, as disclosed pursuant to the compensation
disclosure rules of the Commission,” clarifying its position that the
requirement will be applied to any recipient company filing its proxy
statement after February 17, 2009.
This sudden requirement of “Say on Pay” has stimulated some Forum
participants to suggest our development of model language for a resolution
form. Although the Forum has occasionally presented forms of resolutions as
examples to illustrate a concept – one case being the introduction of
advisory voting in 2006, as reported with an accompanying sample resolution
in section #2 of the
Forum Report on an open meeting of its Options Policies program) – it
has not been a Forum practice to provide the kind of compliance support
that’s offered by professionals or their associations. It has also been the
Forum’s policy to encourage independent rather than conformed actions of its
participants.
Other Forum participants are directing attention to the next steps beyond
the drafting and presentation of resolution forms, anticipating the need to
consider and vote on what’s presented. This is of course what we’d begun to
address.
With this focus on what the Forum can appropriately and effectively do, your
suggestions of a project to support an orderly, sensible response to the new
ARRA requirements will be welcomed.
GL – February 26, 2009
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212-605-0335
Email:
gl@shareholderforum.com
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