Proposed SEC Rule Changes Would Increase Corporate Transparency

Late last week the SEC announced a series of proposed rule changes that it believes will help the agency better protect shareholders.  Let’s do a quick rundown of the proposed changes, which currently are published in the Federal Register and open for comment for 60 days.

One proposal would require companies that received financial assistance through the TARP program to offer separate shareholder votes regarding executive compensation.  The Emergency Economic Stabilization Act of 2008 required that TARP recipients must allow such a vote.  This proposal by the SEC is designed to assist in the implementation of the shareholder executive compensation vote.

A second SEC proposal is intended to provide greater transparency regarding executive compensation, the qualifications of directors and executive officers, the breakdown of the corporate leadership structure, and any potential conflicts of interest in regard to compensation consultants.  Such information would be required in proxy and information statements.

A third SEC proposal was actually an approval of an NYSE proposal to eliminate broker discretionary voting for elections of corporate directors.

What do you think of new SEC’s proposals?

Source: SEC Proposes Rule Changes to Improve Corporate Transparency — (Social Funds)

Tags: broker discretionary voting, corporate governance, executive compensation, NYSE, regulatory reform, sec, tarp