KMK Law Corporate & Securities Blog

On December 11, 2024, the U.S. Court of Appeals for the Fifth Circuit struck down Nasdaq’s board diversity rules, which were designed to increase representation of women and minorities on corporate boards. Since 2023, the rules have required Nasdaq-listed companies to have at least one woman, minority, or LGBTQ+ member on their boards and to report director diversity information each year.

On February 22, 2023, the New York Stock Exchange (NYSE) and on February 24, 2023, Nasdaq filed proposed listing standards with the U.S. Securities and Exchange Commission (SEC) to adopt executive compensation recovery rules. These proposed listing standards implement SEC Rule 10D-1 (the “Clawback Rule”) mandated by Section 954 of the Dodd-Frank Act. The SEC’s final rule directed U.S. stock exchanges to adopt listing standards requiring all listed companies to develop, implement, comply with and disclose a written policy providing for the recovery of incentive-based compensation received by executive officers where that compensation is based on erroneously reported financial information. The stock exchanges will prohibit the initial or continued listing of any security of an issuer that is not in compliance.

This is an update to KMK’s original blog post on December 4, 2020.

On December 1, 2020, Nasdaq filed a rule proposal with the U.S. Securities and Exchange Commission that would require listed companies to have, or explain why their boards do not include, diverse directors. In a response to comments from the SEC, Nasdaq filed an amendment to the rule proposal on February 26, 2021. The Nasdaq proposal needs SEC approval to take effect.

In a notice posted on its website on March 10, 2021, the SEC said it would take additional time to rule on the Nasdaq proposal, while also seeking further ...

On Dec. 1, 2020, Nasdaq filed a rule proposal with the U.S. Securities and Exchange Commission that would require listed companies to disclose board diversity statistics using Nasdaq’s Board Diversity Matrix. Nasdaq would require companies to provide this disclosure in proxy materials or on company websites within one year of the SEC’s approval of the rules. The rules also would require listed companies to have, or explain why their boards do not include, diverse directors as follows:

• All listed companies would be expected to have one diverse director within two years of the ...

On July 1, 2016, the Securities and Exchange Commission (“SEC”) approved changes to Nasdaq Listing Rules 5250 and 5615 requiring Nasdaq-listed companies to publicly disclose compensation or other arrangements by third parties to directors or nominees for director. The new requirements take effect July 31, 2016.

In January 2013, the SEC approved the new listing standards proposed by NASDAQ for independent compensation committees and compensation consultants, legal counsel and other advisors. In November 2013, NASDAQ amended those listing standards and required companies to certify their company’s compliance with, or exemption from, these amended compensation committee listing rules. In January 2014, NASDAQ released the certification form. The certification must be provided to NASDAQ no later than 30 calendar days after the company’s first annual shareholder’s meeting occurring after January 15, 2014, or October 31, 2014, whichever is earlier. 

In January 2013, the SEC approved the new listing standards proposed by Nasdaq for independent compensation committees and compensation consultants, legal counsel and other advisors. These new listing standards, adopted as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and new SEC Rule 10C-1 under the Securities Exchange Act of 1934, are designed to promote the independence of compensation committee members, consultants and advisors.