The SEC on Monday proposed rules to enable shareholders to cast non-binding votes on corporate executive compensation and some so-called golden parachute executive severance arrangements.
Under the proposed rules, publicly traded companies would have to provide shareholders with an advisory vote on executive compensation. In addition, they would have to have a shareholder advisory vote on the frequency of the say-on-pay vote.
Also, companies would have to provide shareholders with an advisory vote on golden parachute compensation arrangements in connection with merger transactions.
Institutional investment managers with at least $100 million in equity assets under management will have to report annually to the SEC details on their votes on say-on-pay, frequency of such votes, and golden parachute arrangements.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama on July 21, mandated the SEC to create rules on such advisory shareholder votes and the money manger reporting requirement. The SEC is seeking public comments on the proposals through Nov. 18.