This article was originally published 15 July, 2009

On July 1, 2009, the SEC approved a number of significant proposed rule amendments, including amendments that would:

  • Require extensive new executive compensation and corporate governance disclosures;
  • Clarify the operation of the proxy solicitation rules; and
  • Clarify the requirements for TARP recipients to submit executive compensation to a shareholder advisory vote, commonly known as "Say-on-Pay."

As stated by the SEC, the express purpose of the proposals is to "better inform and empower investors to improve corporate governance and help restore investor confidence." The proposals are generally consistent with other recent SEC actions that have as their stated goal the strengthening of the position of shareholders within the corporate structure. The SEC anticipates that final rules will be effective for the 2010 proxy season.

The adopting releases relating to these rule proposals are now publicly available. This client update summarizes the most significant of these proposed amendments.

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This article has been prepared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel.