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In its first Regulation FD enforcement action in almost two years, the SEC on Friday filed a cease-and-desist order instituting a settled administrative proceeding against Lawrence D. Polizzotto, the former Vice President of Investor Relations of First Solar Inc.  Without admitting or denying the findings, Polizzotto paid $50,000 to settle the charges and agreed to cease and desist from further violations of Section 13(a) of the Securities Exchange Act of 1934 and Regulation FD. 
Continue Reading SEC Charges Investor Relations Officer with FD Violation

The SEC staff’s issuance last year of a “Wells Notice” to Netflix and its CEO alleging a violation of Regulation FD based on a personal Facebook posting by the CEO caused significant concern.  SEC interpretative guidance in 2008 had focused on the application of Regulation FD to company web site disclosures, but not social media, which were then only starting to gain in popularity.[1]  The Netflix Wells Notice called into question the kinds of judgments practitioners had nonetheless become accustomed to making in the intervening years.
Continue Reading Regulation FD in the Social Media Age

On June 20, 2012, the U.S. Securities and Exchange Commission (the “SEC”) released its final rules (the “Final Rules”) implementing Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).  Section 952 of the Dodd-Frank Act (“Section 952”) added Section 10C to the Securities Exchange Act of 1934 (the “Exchange Act”) and contains a number of provisions generally relating to the independence of compensation committees and their advisers.  The Final Rules are in most respects identical to the proposed rules released on March 30, 2011 (the “Proposed Rules”).[1]  Below is a summary of the provisions of the Final Rules, noting the key changes from the Proposed Rules. 
Continue Reading Dodd-Frank Corporate Governance Final Rules: Compensation Committee and Adviser Independence

An interpretive position recently taken by the Staff of the Securities and Exchange Commission in correspondence with Verizon Communications Inc. has potentially broad implications for reporting compensation in the Summary Compensation Table.  The correspondence involved the characterization of a performance-based equity award under which the compensation committee had significant discretion to adjust the payout based on non-objective criteria.  In the correspondence, the Staff took the position that a portion of the award should have been disclosed in the Summary Compensation Table in the year it was earned, rather than the year in which, based on Verizon’s accounting, the grant date occurred.  The conclusion is notable because:
Continue Reading New Considerations Regarding the Reporting of Equity Rewards in the Summary Compensation Table

Following the SEC’s decision not to seek a rehearing of the decision by the U.S. Court of Appeals for the District of Columbia Circuit vacating its “proxy access” rule (Rule 14a-11 under the Securities Exchange Act of 1934), the stay on the companion “private ordering” amendments to Rule 14a-8 was lifted and those amendments are now in effect. Companies can no longer exclude otherwise-qualifying shareholder proposals seeking to establish a procedure in a company’s governing documents to permit shareholder nominees to be included in the company’s future proxy statements. As with other shareholder proposals, in order to make an access proposal a shareholder need only own $2,000 of company stock and have held it continuously for one year.
Continue Reading Preparing for “Proxy Access” Shareholder Proposals