Over thirteen years after the Dodd–Frank Wall Street Reform and Consumer Protection Act added Section 10D to the Securities Exchange Act of 1934 (the “Exchange Act”), the Securities and Exchange Commission’s (“SEC”) clawback rules became effective on October 2, 2023 (the “Clawback Rules”). Companies listed on national exchanges such as the New York Stock Exchange (“NYSE”) and the Nasdaq Stock Market (“Nasdaq”) will be required to adopt clawback policies by December 1, 2023 and comply with their respective listing standards. Companies, executives and advisors have understandably been grappling with how to ensure compliance with these new Clawback Rules. Below, we address some common questions that we have received.Continue Reading ClawFAQs: Common Clawback Questions
On July 26, 2023, the U.S. Securities and Exchange Commission (the “SEC” or “Commission”) adopted rules to enhance and standardize disclosure requirements related to cybersecurity incident reporting and cybersecurity risk management, strategy, and governance.Continue Reading New SEC Disclosure Rules for Cybersecurity Incidents and Governance and Key Takeaways
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.
In March 2022, the U.S. Securities and Exchange Commission (SEC) issued for public comment a rule proposal regarding certain climate-related disclosures that reporting companies would need to include in their registration statements…
On Friday, the SEC reopened the comment periods for several rulemaking releases due to a technological error that resulted in a number of public comments not being received by the SEC. The reopening affects several important rulemakings, including those on climate-related disclosure, share repurchases, cybersecurity and SPACs. While there has been no official update on timing from the SEC, the reopening makes it highly unlikely that it will issue final rules on these topics in October and casts doubt on its ability to do so by the end of the year.
Continue Reading SEC Comment Period Reopening
Diversity, equity and inclusion (DE&I) has received unprecedented support in the past year, and trends show that it is here to stay at the forefront of focus areas for corporations and key stakeholders alike.
Continue Reading Diversity Issues Remain at Center Stage, and the Show Is Just Getting Started
On November 8, 2021, New York Governor Kathy Hochul signed legislation to permanently amend provisions of the NY Business Corporation Law to allow companies to use electronic means to document action by written consent by boards and to hold virtual shareholder meetings, unless such action is prohibited by the entity’s articles of organization or by-laws. As discussed in our prior post, Governor Cuomo issued two Executive Orders: the first, March 7 Executive Order No. 202, declared a disaster emergency and ceased operations of all non-essential businesses in New York state; and the second, March 20th Executive Order No. 202.8, temporarily suspended several regulations governing meetings at New York corporations. Absent this relief, New York state still required an in-person shareholder meeting be held, although following an October 2019 rule change, it also permitted a virtual component (subject to certain conditions).
Continue Reading Virtual Shareholder Meetings now Permanently Permitted in NY
On November 3, 2021, the Division of Corporation Finance of the SEC (the “Staff”) issued Staff Legal Bulletin (“SLB”) No. 14L, which rescinds SLBs Nos. 14I, 14J and 14K, all of which provided guidance with respect to no-action letter requests that sought relief from the Staff to exclude shareholder proposals on the basis of Rule 14a-8(i)(7) and Rule 14a-8(i)(5). SLB No. 14L also provides guidance on (i) certain technical exclusions, (ii) the use of graphics and images in proposals and (iii) the use of email between proponents and companies.
Continue Reading SEC Provides New Guidance on Shareholder Proposals – Likely To Limit Companies’ Ability To Exclude Environmental and Social Proposals
Diversity has long been a focus for both companies and stakeholders, but 2020 in particular saw diversity come to the forefront of stakeholders’ agendas. Against the backdrop of the ongoing COVID-19 pandemic and its disparate impacts on human capital, alongside increased focus on racial equity and justice and related unrest, we have seen key players across the board push to broaden the scope and impact of diversity issues in the corporate space.
Continue Reading Emphasis on Diversity Initiatives Broadens in Scope and Focuses on Impact
Late last week – for the first time in 40 years – the SEC announced a settlement of an internal controls case against an issuer arising from its repurchase of its own shares. The SEC found that Andeavor bought back $250 million of stock without first engaging in an adequate process to ensure that the…
On August 26, the SEC revised several disclosure requirements applicable to reporting companies. The amendments embrace a “principles-based” approach in the hope that it will elicit more focused and useful disclosures. They will also require issuers to focus on human capital disclosures and on the organization of risk factor disclosures, and some will have to…