The Dodd-Frank Act, which was signed into law on July 21, 2010, requires regulators from 21 agencies to issue 400 final rules. Through January 3, 2012, 86 rules were finalized and regulators missed deadlines for 149 rules. Regarding these missed deadlines, regulators have proposed rules for all but 25 rules.
2011: Year of the Delay
The SEC previously scheduled the following executive compensation-related rules for adoption in the first half of 2012. Unsurprisingly, these rules have been delayed yet again with proposed rules due in the first half of 2012 and final rules due in the second half of 2012:
- Disclosure of “pay vs. performance,” CEO-employee pay ratios and hedging by employees and directors
- Executive compensation “clawbacks”
Similarly, the SEC has further delayed final adoption of the following proposed rules, which have been rescheduled for the first half of 2012:
- Exchange listing standards regarding compensation committee independence and factors affecting compensation adviser independence
- Disclosure regarding compensation consultant conflicts of interest
- Disclosure related to “conflict minerals”
- Enhanced disclosure by resource extraction issuers
Managing Expectations
The rules listed above will not be effective for the spring proxy season, as had once been feared. Consistent with guidance in our Fall 2011 Newsletter, public companies should continue to monitor the rulemaking process but should not expect regulators to issue proposed and final rules at a faster pace. And, if the SEC’s annual budget is cut as some lawmakers have threatened, public companies may actually see an already slow process become even slower. Those interested in a more precise “estimate” of when final rules may be expected should monitor the SEC’s schedule of Commission Open Meetings.
Additional Articles from the Winter 2012 Public Company Forum:
Introduction
Playing the Government Incentives Game
Shedding Light on Political Spending
Attorney-Client Privilege – A Public Company Gotcha
Angry Birds and Board Books: The Case for Electronic Board Portals