KMK Law Corporate & Securities Blog

On September 6, 2011, the Securities and Exchange Commission released a statement that it would not seek rehearing of the decision by the U.S. Court of Appeals for the District of Columbia circuit in the case captioned Business Roundtable and U.S. Chamber of Commerce vs. Securities and Exchange Commission or seek review of the decision by the U.S. Supreme Court. The decision vacated new proxy access Rule 14a-11, which would have required companies to include shareholders' director nominees in company proxy materials under certain circumstances.

On July 22, 2011, the United States Court of Appeals for the District of Columbia Circuit handed down a decision in the case captioned Business Roundtable and U.S. Chamber of Commerce vs. Securities and Exchange Commission, which vacates new proxy access Rule 14a-11, and related amendments to Rule 14a-8 on shareholder proposals.

Code Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") precludes a tax deduction for remuneration paid to certain employees of publicly held companies in excess of $1,000,000.  On June 23, 2011 the IRS issued proposed regulations under Code Section 162(m) to clarify two provisions of existing treasury regulations. 

On May 25, 2011, over a month after its scheduled release date, the SEC adopted rules to implement Section 21F of the Exchange Act, "Securities Whistleblower Incentives and Protection," which was added by Section 922 of Dodd-Frank. 

The SEC recently proposed rules to revise its definition of "Accredited Investor" so that it mirrors the definition adopted by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the proposed rules, a person is no longer permitted to include the value of his or her primary residence in determining whether they meet the $1 million net worth requirement for an Accredited Investor. The proposed rules do not define "primary residence," but do say that, for the most part, the common meaning of "the home where a person lives most of the time" should be used, whereas, in complex cases, the federal income tax rules should be consulted for guidance.

On January 25, 2011, the Securities and Exchange Commission ("SEC") adopted final "Shareholder Approval of Executive Compensation and Golden Parachute Compensation" rules, which are effective for annual meetings of shareholders conducted on or after January 21, 2011. Also known as "Say-on-Pay," the final rules address three separate shareholder votes mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act and several proxy disclosures surrounding these votes. Click here for our firm's complete advisory.

On October 27, 2010, the Financial Accounting Standards Board met to further discuss the timeline for adoption of its Exposure Draft of a proposed Statement, Contingencies (Topic 450), Disclosure of Certain Loss Contingencies.  For an overview of this Exposure Draft and the events leading up to its issuance, please see our previous blog on this subject.

On October 18, 2010, the SEC released proposed rules on "Shareholder Approval of Executive Compensation and Golden Parachute Compensation" which address three separate shareholder votes mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act for annual meetings of shareholders conducted on or after January 21, 2011.

Yesterday, the SEC decided to stay the effectiveness of the proxy access rules pending resolution of a petition for review filed in connection with this lawsuit filed by the Business Rountable and U.S. Chamber of Commerce.  As a result, proxy access will not take effect in 2010 and its potential applicability to the 2011 proxy season is in limbo.

The Business Roundtable and U.S. Chamber of Commerce have filed a lawsuit in the U.S. Court of Appeals for the D.C. Circuit to invalidate the SEC’s recently-adopted proxy access rules.