SEC Proposals regarding Executive Compensation

SEC has called these as measures to improve corporate governance and enhance investor confidence. These measures are being implemented through changes in proxy statements and voting practices. Appears to be in keeping with SEC policy of disclosures rather than making governing regulations. Proposed changes which will be implemented post January 1, 2010 are as follows:

• Shareholder approval of executive compensation of TARP recepients - This is essentially driven by The Emergency Economic Stabilization Act of 2008 and is applicable till the time company avails of any TARP funds. Smaller Reporting companies have been provided some relief from the requirements suggested. With big banks lining up to return TARP funds, don't know how many would be under the ambit of this proposed rule by the time it is implemented.
• Proxy Disclosure and Solicitation Enhancements - In keeping with SEC policy of enhancing disclosures rather than regulating. Rule covers compensation disclosure in proxy statement, corporate governance with regard to conflict of interest and reporting of annual stock and option awards.
• NYSE Rule concerning discretionary proxy voting by broker dealers - NYSE proposale to amend NYSE Rule 452. Voting regarding election of directors cannot be done without explicit beneficial owner approval. Investment companies are however exempt from this rule change.

For details with regard to this proposal visit Proposal 34-60218