On June 20th, the Securities and Exchange Committee “directed” national securities exchanges to adopt certain listing standards for public company compensation committees of corporate boards of directors. The Dodd-Frank Act mandated that the SEC developed these new regulations, which directs national exchanges to issue guidance addressing the:
- Independence of compensation committee members
- Committee’s responsibility for appointing, compensating, and supervising the work of a compensation adviser, and
- Compensation committee’s authority to retain compensation advisers and the independence of those advisers.
Complying with the new listing standards, once adopted by a national exchange, will be a requirement for a company in order to retain their listing.
A fact sheet summary and the full text of the new regulation is posted on the SEC website (www.sec.gov).