ISS Releases 2018 Voting Policy Updates
|
|
- Chad Hawkins
- 6 years ago
- Views:
Transcription
1 Focus on Excessive Non-Employee Director Compensation, Board Diversity and Gender Pay Gap Continues While Poison Pills Return to the Spotlight SUMMARY Yesterday, Institutional Shareholder Services published updates to its benchmark proxy voting policies applicable to meetings held on or after February 1, For U.S. companies, the key updates are: Non-Employee Director Pay: Vote recommendations against the committee members responsible for setting non-employee director (NED) compensation if there is a recurring pattern (e.g., two or more successive years) of excessive NED pay without a compelling rationale or other mitigating factors. This update, however, will not affect 2018 vote recommendations. Poison Pills: Vote recommendations against the full board at companies that maintain longterm poison pills that were not approved by shareholders. Members of annually elected boards would receive against recommendations on an annual basis, rather than every three years. Commitments to put a pill to a vote the following year would no longer be considered a mitigating factor. Boards with 10-year pills currently grandfathered from 2009 would no longer be exempt and would receive against recommendations. Shareholder Proposals on Gender Pay Gap: Vote recommendations on a case-by-case basis on shareholder proposals requesting reports, policies or goals related to gender pay inequity. This update is intended to provide more clarity on the relevant factors because ISS expects the number of gender pay gap proposals to grow. Increasing Focus on Board Diversity: Highlighting of boards with no gender diversity, although this factor will not drive adverse vote recommendations. Pay-for-Performance Evaluation: Quantitative analysis of CEO total pay and company financial performance within a peer group (each over a three-year period). This analysis was added to the qualitative review last season but will now apply as part of the quantitative Peer Group Alignment factor for companies in the Russell 3000 or Russell 3000E Indices. Board Responsiveness to Say-on-Pay: Evaluation of additional factors, including the timing and frequency of engagements, whether independent directors participated and disclosure of the specific concerns voiced by dissenting shareholders. New York Washington, D.C. Los Angeles Palo Alto London Paris Frankfurt Brussels Tokyo Hong Kong Beijing Melbourne Sydney
2 Pledging: Vote recommendations against committee members that oversee risks related to pledging if a significant level of pledged company stock raises concerns. Although there has not previously been an explicit policy, ISS has been recommending on this basis since 2013 under its Governance Failures policy. DESCRIPTION OF 2018 U.S. POLICY UPDATES A. PROBLEMATIC COMPENSATION PRACTICES 1. Excessive Non-Employee Director Compensation The update responds to increasing investor focus on NED compensation, including shareholder challenges brought in proxy contests or legal actions. ISS will generally recommend against members of the board committee responsible for approving or setting NED compensation if there is a pattern of awarding excessive NED compensation without disclosing a compelling rationale or other mitigating factors. ISS defines a pattern as two or more years in a row. Therefore, this new policy will not impact vote recommendations in 2018 and will be triggered only after a pattern of excessive NED pay in consecutive years. The update does not define excessive, although it suggests that it will be evaluated on a basis relative to peers and, potentially, the broader market. 2. Problematic Pledging of Company Stock The update provides for an against vote recommendation for members of the committee that oversees risks related to pledging 1 if a significant level of pledged company stock by executives or directors raises concerns. ISS will consider the following factors when making its recommendation relating to problematic pledging: the presence of an anti-pledging policy disclosed in the proxy statement that prohibits future pledging activity, the magnitude of the aggregate pledged shares, the disclosure of progress (or lack thereof) in reducing the magnitude of aggregate pledged shares over time, proxy disclosure that states shares subject to stock ownership and holding requirements do not include pledged company stock and any other relevant factors. Although there has not previously been an explicit policy, ISS states that it has been recommending on this basis since 2013 under its Governance Failures policy. 3. Failure to Include Say-on-Pay Ballot Items The update provides that ISS will recommend against the compensation committee if the company fails to include a say-on-pay ballot item when required by SEC rules or under its own say-on-pay frequency or if the company fails to include a say-on-pay frequency vote when required. Historically, when companies did not have the say-on-pay on their ballot when required, ISS had been recommending against the election of the compensation committee members. The update codifies this preexisting practice. In addition, large companies who held their initial say-on-pay frequency votes in 1 As a general matter, if the full board is responsible for a decision as opposed to a committee, ISS will recommend against all members of the board. The update does not affect this policy, and we do not distinguish between these two circumstances in this memorandum. -2-
3 2011 were required to hold them again in Some companies inadvertently omitted the vote, and ISS states that it reached out to companies that lacked the ballot item so that they could add it to the agenda if required. For companies that were on a biennial or triennial frequency and did not have the required vote, ISS recommended against their say-on-pay resolution or, in its absence, against members of their compensation committees. There was not an adverse vote recommendation if the company failed to timely present a frequency proposal but maintained an annual say-on-pay vote. 4. Other Problematic Pay Practices The update removes two current problematic pay practices. ISS states that the first, failure to submit onetime transfers of stock options to a shareholder vote, was so rare as to no longer require a separate policy. ISS notes, however, that it will continue to recommend against compensation committee members on this basis. The second practice removed, failure to fulfill the terms of a burn rate commitment, is no longer relevant because ISS stopped considering new three-year burn commitments following the introduction of its Equity Plan Scorecard in the 2015 proxy season. B. NON-SHAREHOLDER APPROVED LONG-TERM POISON PILLS The update provides that ISS will recommend against annually elected board nominees every year (instead of every three years) at companies that maintain a long-term poison pill that was not approved by shareholders. Previously, annually elected boards would only receive an against recommendation every three years. Putting the long-term poison pill to a shareholder vote the following year will no longer be considered a mitigating factor. Boards that adopted 10-year poison pills before 2009 will no longer be grandfathered and exempt from receiving against vote recommendations; there are approximately 90 previously grandfathered companies that have adopted or renewed such pills. For adoptions of short-term poison pills (with a term of one year or less), the update provides for a caseby-case analysis with a special emphasis on the board s rationale for adopting the pill rather than the company s governance and track record. The update removes specific policies that provided for a recommendation against all board nominees every year until a dead-hand or modified-dead hand feature was removed because such poison pills would be captured under the new policy. (ISS states that only five such pills at active companies exist.) C. GENDER PAY GAP 1. ISS Policy on Shareholder Proposals The update introduces a new policy regarding shareholder proposals on gender pay inequity. ISS will make voting recommendations on a case-by-case basis for shareholder proposals requesting reports on a company s pay data by gender or on a company s policies and goals to reduce any existing gender pay gaps. Factors that will be taken into account include: -3-
4 the company s current policies and disclosures related to its practices and policies on diversity and inclusion; the company s compensation philosophy and use of fair and equitable compensation practices; whether the company has been the subject of recent controversy, litigation or regulatory actions related to gender pay gap issues; and whether the company s reporting regarding gender pay gap policies or initiatives is lagging behind its peers. ISS indicated that the policy was introduced in anticipation of a growing number of gender pay gap shareholder proposals. 2. U.K. Gender Pay Gap Reporting Regulations The update continues a trend of increased attention on the gender pay gap issue, and companies should be aware of the associated compliance, disclosure and optical considerations that accompany it. For example, the U.K. gender pay gap reporting regulations (part of the Equality Act 2010) came into effect in April of this year, requiring organizations in Great Britain with over 250 employees to comply with reporting obligations and publish data on the gender pay gap in their workforce. The requisite data includes: the mean and median pay gap (the difference in hourly pay of male and female full-time employees); the mean and median bonus pay gap (the difference in bonuses paid to male and female employees); the proportion of female employees who received a bonus compared to male employees; and the percentage of male and female employees in each of four quartiles when ranked by hourly rate of pay. Publication of the results must occur annually on the company s website, where it must remain for at least three years, and on a government website. D. INCREASING FOCUS ON BOARD DIVERSITY The update revises ISS s fundamental policies to include the statement that boards should be sufficiently diverse to ensure consideration of a wide range of perspectives. The policies on board composition were also updated to include a separate category for diversity, and ISS will now highlight boards that have no gender diversity. However, this factor will not drive adverse vote recommendations E. PAY-FOR-PERFORMANCE EVALUATION The update incorporates ISS s Relative Financial Performance Assessment into the quantitative pay-forperformance evaluation methodology for companies in the Russell 3000 or Russell 3000E Indices. The Relative Financial Performance Assessment compares the company's rankings to a peer group with respect to (1) CEO pay and (2) financial performance in three or four metrics (which will vary depending -4-
5 on industry), in each case as measured over three years. This analysis was added to the qualitative review last season but will now apply as part of the quantitative Peer Group Alignment factor. Details around the mechanics of the updated quantitative screening methodology will be provided in an updated white paper. F. BOARD RESPONSIVENESS TO SAY-ON-PAY The update refines and clarifies its approach to assessing a board s responsiveness to the say-on-pay vote, which will now be evaluated as part of Board Responsiveness rather than Board Accountability. If a company s prior say-on-pay vote received less than 70% support of votes cast, ISS will consider the timing and frequency of engagements with major institutional investors and whether independent directors participated in such engagement in forming its vote recommendation, as well as disclosure of the specific concerns voiced by dissenting shareholders along with the specific and meaningful actions taken to address such concerns in evaluating the board s responsiveness. * * * Copyright Sullivan & Cromwell LLP
6 ABOUT SULLIVAN & CROMWELL LLP Sullivan & Cromwell LLP is a global law firm that advises on major domestic and cross-border M&A, finance, corporate and real estate transactions, significant litigation and corporate investigations, and complex restructuring, regulatory, tax and estate planning matters. Founded in 1879, Sullivan & Cromwell LLP has more than 875 lawyers on four continents, with four offices in the United States, including its headquarters in New York, four offices in Europe, two in Australia and three in Asia. CONTACTING SULLIVAN & CROMWELL LLP This publication is provided by Sullivan & Cromwell LLP as a service to clients and colleagues. The information contained in this publication should not be construed as legal advice. Questions regarding the matters discussed in this publication may be directed to any of our lawyers listed below, or to any other Sullivan & Cromwell LLP lawyer with whom you have consulted in the past on similar matters. If you have not received this publication directly from us, you may obtain a copy of any past or future publications by sending an to SCPublications@sullcrom.com. CONTACTS New York Francis J. Aquila aquilaf@sullcrom.com Robert E. Buckholz buckholzr@sullcrom.com Catherine M. Clarkin clarkinc@sullcrom.com Audra D. Cohen cohena@sullcrom.com H. Rodgin Cohen cohenhr@sullcrom.com Heather L. Coleman colemanh@sullcrom.com Donald R. Crawshaw crawshawd@sullcrom.com Robert W. Downes downesr@sullcrom.com Mitchell S. Eitel eitelm@sullcrom.com William G. Farrar farrarw@sullcrom.com Matthew M. Friestedt friestedtm@sullcrom.com Joseph B. Frumkin frumkinj@sullcrom.com David B. Harms harmsd@sullcrom.com Alexandra D. Korry korrya@sullcrom.com Stephen M. Kotran kotrans@sullcrom.com John P. Mead meadj@sullcrom.com Mark J. Menting mentingm@sullcrom.com Scott D. Miller millersc@sullcrom.com Robert W. Reeder III reederr@sullcrom.com -6-
7 Robert S. Risoleo Melissa Sawyer Glen T. Schleyer William Torchiana Marc Trevino Krishna Veeraraghavan Washington, D.C. Eric J. Kadel, Jr Janet T. Geldzahler Richard C. Morrissey Robert S. Risoleo Los Angeles Patrick S. Brown Eric M. Krautheimer Alison S. Ressler Palo Alto Scott D. Miller Sarah P. Payne John L. Savva London Nikolaos G. Andronikos Kathryn A. Campbell John O Connor oconnorj@sullcrom.com David Rockwell rockwelld@sullcrom.com Paris William D. Torchiana torchianaw@sullcrom.com Frankfurt Krystian Czerniecki czernieckik@sullcrom.com Melbourne Robert Chu chur@sullcrom.com Sydney Waldo D. Jones Jr jonesw@sullcrom.com Tokyo Izumi Akai akaii@sullcrom.com Keiji Hatano hatanok@sullcrom.com -7-
8 Hong Kong Garth W. Bray Michael G. DeSombre Chun Wei SC1: v3-8-
ISS Proxy Voting Policy Updates
Updates for U.S. Companies in 2017 Include Negative Director Recommendations for Dual-Class IPO Companies and Implementation of Tougher Overboarding Restriction SUMMARY Yesterday, Institutional Shareholder
More informationNasdaq Compensation Committee Independence Requirements
Nasdaq Compensation Committee Independence Requirements SEC Publishes Nasdaq Rule Change Removing Prohibition on Receipt of Compensatory Fees by Compensation Committee Members; Change Aligns Nasdaq Rule
More informationTweets Allowed in Proxy Contests and Securities Offerings
Tweets Allowed in Proxy Contests and Securities Offerings New SEC Guidance Allows Use of Hyperlinks to Satisfy Legend Requirements in Social Media Communications with Character Limits and Limits Issuers
More informationNYSE Notice Procedures
NYSE Proposes to Require Electronic Submission of Notices to NYSE Through Web-Based Communication System SUMMARY The SEC has published for public comment proposed changes to the New York Stock Exchange
More informationFinal Stock Exchange Rules for Compensation Committees and Advisers
Final Stock Exchange Rules for Compensation Committees and Advisers SEC Approves NYSE and Nasdaq Revised Listing Standards; Board Action Required by July 1, 2013 with Regard to Compensation Committee Authority
More informationSEC Staff Begins Taking Steps to Reform Shareholder Proposals
SEC Staff Begins Taking Steps to Reform Shareholder Proposals Guidance Contemplates New Board of Director Involvement in the Ordinary Business and Economic Relevance Exclusions and Suggests the Staff Would
More informationSEC Adopts CEO Pay Ratio Rule
New Rule Will Not Be Effective Until 2018 Proxy Season SUMMARY On Wednesday, the SEC published the text of its final rule, adopted that morning by a three-to-two vote, that U.S. public companies disclose:
More informationSEC Finalizes Guidance to Stock Exchanges on Compensation Committee and Adviser Independence
SEC Finalizes Guidance to Stock Exchanges on Compensation Committee and Adviser Independence Exchanges Still Responsible for Key Details, Including Definition of Independence, and Have 90 Days to Propose
More informationSEC Guidance on Reporting for U.S. Tax Reform
SEC Guidance on Reporting for U.S. Tax Reform SEC Staff Releases Guidance on Form 8-K Reporting for the Re-Measurement of Deferred Tax Assets and on Initial Income Tax Effects of New Tax Legislation SUMMARY
More informationProxy Litigation SUMMARY. February 27, 2013
Court Enjoins Apple Shareholder Vote on a Charter Amendment Under SEC s Unbundling Rules but Refuses to Enjoin Say-on-Pay Vote Based on CD&A Disclosure SUMMARY On February 22, 2013, the United States District
More informationNew SEC Staff Guidance on Shareholder Proposals
New SEC Staff Guidance on Shareholder Proposals Continues to Encourage Board of Director Involvement in the Ordinary Business and Economic Relevance Exclusions and Provides Examples of Useful Factors from
More informationSEC Approves NYSE Proposal to Facilitate Listings of Companies Without a Trading History
SEC Approves NYSE Proposal to Facilitate Listings of Companies Without a Trading History SUMMARY On February 2, 2018, the SEC issued an order approving, on an accelerated basis, a proposed rule filed by
More informationSEC Approves New PCAOB Auditor Reporting Standard
SEC Approves New PCAOB Auditor Reporting Standard New Standard Expands the Scope of the Auditor s Report and Requires Auditors to Identify and Discuss Critical Audit Matters SUMMARY On October 23, 2017,
More informationSEC Proposes Guidance to Stock Exchanges on Compensation Committee and Adviser Independence
SEC Proposes Guidance to Stock Exchanges on Compensation Committee and Adviser Independence Exchanges Will Be Responsible for Details, Including Whether Significant Stock Ownership Will Impact Committee
More informationISS to Introduce QuickScore 3.0 on Friday
New Governance Factors Previewed; Details to be Published on October 31; Data Verification Period to Follow Through November 14 SUMMARY Institutional Shareholder Services, the proxy advisory firm, has
More informationRecent 2013 Proxy Season Developments
ISS Publishes Proposed Updates to Its 2013 Proxy Voting Guidelines, Including Making Board Responsiveness Policy More Stringent and Revising Pay-for-Performance Test to Account for Company Peer Group and
More informationFINRA Corporate Financing
FINRA Solicits Comments on Proposed Amendments to the Corporate Financing Rule (Underwriting Terms and Arrangements) SUMMARY FINRA is soliciting comments on proposed amendments to FINRA Rule 5110 the Corporate
More informationISS Publishes Guidance on Pay-for- Performance Assessments and Updates to Governance Ratings System
ISS Publishes Guidance on Pay-for- Performance Assessments and Updates to Governance Ratings System Provides Additional Detail on Measuring Relative and Absolute Alignment Between CEO Pay and Total Shareholder
More informationNYSE Corporate Governance Standards
SEC Publishes Proposed Changes to Update and Clarify NYSE Corporate Governance Standards SUMMARY The SEC has published for public comment proposed changes to the New York Stock Exchange corporate governance
More informationIn the Matter of Kenneth Cole Productions, Inc. Shareholder Litigation
In the Matter of Kenneth Cole Productions, Inc. Shareholder Litigation New York Court of Appeals Adopts MFW Business Judgment Standard of Review for Squeeze-Out Mergers In, 1 the New York Court of Appeals
More informationRegistered Offerings of Debt Securities
SEC Proposes Amendments to Simplify and Streamline Financial Disclosures About Issuers and Guarantors of Guaranteed Securities and Affiliates Whose Securities Collateralize Registered Securities SUMMARY
More informationSEC Approves New PCAOB Auditing Standard Relating to Communications Between Auditors and Audit Committees
January 2, 2013 SEC Approves New PCAOB Auditing Standard Relating to Communications Between Auditors and The U.S. Securities and Exchange Commission has approved Auditing Standard No. 16, Communications
More informationEmergency SEC Orders Concerning Short Sales
Emergency SEC Orders Concerning Short Sales SEC Takes Temporary Action to Prohibit Most Short Sales in Publicly Traded Shares of Certain Financial Firms and to Require Certain Institutional Investment
More informationProperty Disclosure Rules for Mining Registrants
Property Disclosure Rules for Mining Registrants SEC s Proposal Would Align Its Disclosure Requirements With Current Industry and Global Regulatory Standards SUMMARY The SEC has proposed rules to modernize
More informationForeign Private Issuer Exemption from SEC Registration
SEC Proposes to Amend the Rule 12g3-2(b) Exemption SUMMARY On February 25, 2008, the Securities and Exchange Commission published proposed amendments to Rule 12g3-2(b), which provides an exemption from
More informationSEC Adopts New Rules Affecting Public Company Reporting
SEC Adopts New Rules Affecting Public Company Reporting SEC Requires Use of Inline XBRL for Public Companies Including Funds, Eliminates XBRL Website Posting Requirement, Expands Companies Eligible for
More informationLarge Trader Reporting System
SEC Proposes Creation of a Reporting and Information-Gathering System Applicable to Certain Large Market Participants and U.S. Registered Broker-Dealers SUMMARY The SEC has proposed a new Rule 13h-1 and
More informationPrivate Offering Reform
SEC Publishes Details of Proposed New Exemption Permitting Limited Publicity in Unregistered Offerings SUMMARY The Securities and Exchange Commission has published the text of proposed revisions to Regulation
More informationCompensation and Corporate Governance Disclosure and Proxy Solicitation
Compensation and Corporate Governance Disclosure and Proxy Solicitation SEC Publishes Proposed Rules to Expand Disclosure Regarding Compensation and Corporate Governance Matters and to Clarify Proxy Solicitation
More informationDelaware s Most Recent Thinking on the Preferred-Common Conflict: Hsu v. ODN Holding Corp. and In re Appraisal of GoodCents Holdings, Inc.
Delaware s Most Recent Thinking on the Preferred-Common Conflict: Hsu v. ODN Holding Corp. and In re Appraisal of GoodCents Holdings, Inc. Delaware Court of Chancery Addresses the Rights of Preferred Stockholders
More informationIn re Micromet, Inc. Shareholders Litigation
Delaware Chancery Court Reaffirms Revlon Duties related to Pre- Signing Market Checks and Parameters of Fiduciary Duty of Disclosure SUMMARY In its recent Micromet 1 preliminary injunction decision, the
More informationMore Clarity for Delaware Directors When Considering Restructuring Transactions
More Clarity for Delaware Directors When Considering Transactions SUMMARY In Quadrant Structured Products Co., Ltd. v. Vertin (May 4, 2015) ( Quadrant ), the Delaware Court of Chancery confirms again that
More informationSEC Proposes Rule Regarding Communications Involving Security- Based Swaps Entered Into Solely by Eligible Contract Participants
SEC Proposes Rule Regarding Communications Involving Security- Based Swaps Entered Into Solely by Eligible Contract Participants SUMMARY On September 8, 2014, the Securities and Exchange Commission proposed
More informationAdjusting to Shareholder Activism
Active Shareholders are the New Normal, Placing a Premium on Management Preparedness, Board Awareness and Ongoing Shareholder Engagement for Public Companies SUMMARY The results of the 2013 proxy season
More informationIn re: Appraisal of Dell Inc.
Delaware Court of Chancery Determines Fair Value Is 28% Higher Than Merger Price Following an Auctioned Arm s-length MBO SUMMARY In, 1 the Delaware Court of Chancery (Laster, V.C.) held in an appraisal
More informationSEC Adopts Final Rules to Implement the Resource Payments Disclosure Requirements of the Dodd-Frank Act
SEC Adopts Final Rules to Implement the Resource Payments Disclosure Requirements of the Dodd-Frank Act Final Rules Require Filing a Separate Report Disclosing Payments Made to Governments for the Commercial
More informationOCC Issues Updated Policy for Determining the Impact of Discriminatory or Illegal Credit Practices on Community Reinvestment Act Ratings
OCC Issues Updated Policy for Determining the Impact of Discriminatory or Illegal Credit Practices on Community Reinvestment Act Ratings OCC Issues Policies and Procedures Manual Update Setting Forth a
More informationSEC Provides Relief to Security-Based Swap Dealers From Business Conduct Rules
SEC Provides Relief to Security-Based Swap Dealers From Business Conduct Rules Relief From Certain Documentation Requirements Under the SEC s Business Conduct Rules Would Apply for Five Years After the
More informationSEC Reopens Comment Period on Proposed Rules Regarding Security-Based Swaps
SEC Reopens Comment Period on Proposed Rules Regarding Security-Based Swaps SEC Reopens Comment Period and Requests Additional Comment on Previously Proposed Rules Regarding Capital, Margin and Collateral
More informationProxy System Modernization
SEC Issues Concept Release Seeking Comment on Perceived Deficiencies in the U.S. Proxy System and Potential Regulatory Responses SUMMARY On July 14, 2010, the SEC issued a concept release seeking public
More informationAgencies Release New FAQ on CEO Certification Requirement, Setting March 31, 2016 Deadline for Initial Submissions
Agencies Release New FAQ on CEO Certification Requirement, Setting March 31, 2016 Deadline for Initial Submissions Earlier today, the Board of Governors of the Federal Reserve System (the Federal Reserve
More informationSULLIVAN & CROMWELL LLP
SULLIVAN & CROMWELL LLP August 3, 2005 M EMORANDUM Re: Executive Summary: SEC Adopts Landmark Reforms to the Registered Securities Offering Process The SEC has unanimously adopted new rules and amendments
More informationShareholder Proxy Access
SEC Proposes Two Mutually Exclusive Alternatives on Shareholder Access; Proposals Would Prohibit or Permit Binding Shareholder Proposals SUMMARY At its July 25, 2007 meeting, the SEC revisited the issue
More informationBrexit: U.S. Agencies Facilitate Legacy Swap Transfers
Brexit: U.S. Agencies Facilitate Legacy Swap Transfers Under Interim Final Rule, Legacy Swaps Currently Exempt from the Swap Margin Rule Would Maintain Legacy Status If Transferred from U.K. Financial
More informationIn re Orchard Enterprises, Inc. Stockholder Litigation
In re Orchard Enterprises, Inc. Stockholder Litigation Delaware Court of Chancery Provides Guidance on Squeeze-Out Mergers and Entire Fairness Review at Summary Judgment SUMMARY In a recent opinion analyzing
More informationCompany Halts Initial Coin Offering After SEC Issues Cease-and-Desist Order; SEC Chairman Issues Statement on Blockchain- Based Offerings
Company Halts Initial Coin Offering After SEC Issues Cease-and-Desist Order; SEC Chairman Issues Statement on Blockchain- Based Offerings Without Alleging Fraud, SEC Order Finds That Company s Token Sale
More informationBank Capital Plans and Stress Tests
FDIC and OCC Propose Amendments to Their Stress Testing Rules SUMMARY On December 18, the FDIC and the OCC issued proposed rules that would amend their respective stress testing rules that implement the
More informationEuropean Commission Proposes Disclosure Requirements for Payments to Governments for the Development of Natural Resources
European Commission Proposes Disclosure Requirements f Payments to Governments f the Development of Natural Resources Summary Side-by-Side Comparison of and United States Proposals SUMMARY On October 25,
More informationSEC Work Plan for Consideration of IFRS Adoption
SEC Work Plan for Consideration of IFRS Adoption SEC Publishes a Work Plan to Study Potential Adoption of IFRS for U.S. Issuers; Potential Transition to IFRS Delayed Until 2015-2016 SUMMARY The SEC has
More informationBank Capital Plans and Stress Tests
January 26, 2016 Bank Capital Plans and Stress Tests Federal Reserve Finalizes Rule Revising FR Y-14 Forms to Include CFO Attestation Requirements for Certain Large Bank Holding Companies On January 21,
More informationRegulators Explain Examination Approach for Compliance With FinCEN s Customer Due Diligence Rule
Regulators Explain Examination Approach for Compliance With FinCEN s Customer Due Diligence Rule FFIEC s New Examination Procedures Align with FinCEN s Rule and Existing Guidance; Impose No Lower Beneficial
More informationFederal Reserve Proposes New Rating System
Federal Reserve Proposes New Rating System Federal Reserve Proposes to Establish a New Rating System for the Supervision of Large Financial Institutions Designed to Align with the Supervisory Program for
More informationFinCEN Issues Frequently Asked Questions Regarding Customer Due Diligence Requirements
FinCEN Issues Frequently Asked Questions Regarding Customer Due Diligence Requirements Frequently Asked Questions Clarify Aspects of Beneficial Ownership Threshold, Identity Collection and Verification,
More informationJANA Master Fund, Ltd. v. CNET Networks, Inc.
JANA Master Fund, Ltd. v. CNET Networks, Inc. Delaware Chancery Court Rules That Company's Advance Notice Bylaw Applies Only to 14a-8 Proposals, and Not Independently Financed Proxy Solicitations SUMMARY
More informationFederal Reserve Issues Statement of Intent to Extend the Volcker Rule Conformance Period Through July 21, 2017 for CLOs
April 8, 2014 Federal Reserve Issues Statement of Intent to Extend the Conformance Period Through July 21, 2017 for CLOs Late yesterday afternoon, the Board of Governors of the Federal Reserve System (the
More informationAnother Vice Chancellor Considers Appraisal in Light of Dell and DFC and Another Appraisal Petitioner Gets Less than Deal Price
Another Vice Chancellor Considers Appraisal in Light of Dell and DFC and Another Appraisal Petitioner Gets Less than Deal Price However, This Time, the Court of Chancery Relies on DCF Analysis and Not
More informationRecovery Planning Guidelines for Certain Large Banks
Recovery Planning Guidelines for Certain Large Banks Proposed OCC Guidelines Would Require Recovery Planning for Large National Banks, Insured Federal Savings Associations and Insured Federal Branches
More informationFederal Reserve Supervision
Federal Reserve Updates Consolidated Supervision Framework for Large Financial Institutions SUMMARY On December 17, 2012, the staff of the Federal Reserve issued a Supervision and Regulation ( SR ) letter
More informationFDIC Proposal on Compensation Programs
FDIC Authorizes Publication of Advance Notice of Proposed Rulemaking on Employee Compensation at Banking Organizations SUMMARY At the January 12, 2010 meeting, the Board of Directors of the Federal Deposit
More informationTreasury Issues Comprehensive Report on Capital Markets Reform
Treasury Issues Comprehensive Report on Capital Markets Reform Trump Executive Order Required Fundamental Reassessment of Existing Rules; Treasury Submits the Second of Four Reports Examining the Regulatory
More informationIRS Releases Initial Guidance on the 2017 Amendments to the Internal Revenue Code s Limitation on Deduction for Certain Executive Compensation
IRS Releases Initial Guidance on the 2017 Amendments to the Internal Revenue Code s Limitation on Deduction for Certain Executive Compensation Notice 2018-68 Provides Guidance on the Application of the
More informationTax Reform Bill Proposes Significant Compensation Changes
Tax Reform Bill Proposes Significant Compensation Changes Tax Reform Proposal Would Eliminate Nonqualified Deferred Compensation, Limit Deductions for Payments to Highly Compensated Officers and Restrict
More informationIn re MFW Shareholders Litigation
Controlling Stockholder s Upfront Commitment to Both Approval by Special Committee and Majority-of-the-Minority Vote Warrants Business Judgment Rule Standard of Review For Freeze-Out Mergers SUMMARY In
More informationProposed Roadmap For IFRS Adoption
SEC Proposes a Roadmap that Could Lead to Mandatory Use of IFRS by U.S. Issuers Beginning in 2014-2016; Also Proposes Rules Permitting Early Use of IFRS by Certain U.S. Issuers SUMMARY The SEC has published
More informationRisk-Based Bank Capital Guidelines
Federal Banking Agencies Seek Comment on Alternatives to Credit Ratings in Risk-Based Capital Guidelines SUMMARY On August 10, 2010, the Office of the Comptroller of the Currency, the Board of Governors
More informationBank Mergers & Acquisitions
Federal Reserve Board s Approval of Capital One's Acquisition of ING Direct Discusses Financial Stability Factor INTRODUCTION Late yesterday, the Federal Reserve Board ("FRB") issued an Order (the "Capital
More informationFederal Banking Agencies Release New Guidance on the Treatment of Foreign Excluded Funds Under the Volcker Rule
Federal Banking Agencies Release New Guidance on the Treatment of Foreign Excluded Funds Under the SUMMARY On Friday afternoon, the staffs of the Board of Governors of the Federal Reserve System (the Federal
More informationIn re Southern Peru Copper Corporation Shareholder Derivative Litigation
In re Southern Peru Copper Corporation Shareholder Derivative Litigation Delaware Chancery Court Finds Acquisition by Southern Peru Copper of a Subsidiary Owned by Its Controlling Shareholder Did Not Satisfy
More informationBank Capital Requirements
Federal Reserve, OCC and FDIC Release Joint Proposal Regarding the Implementation of CECL and Their Regulatory Capital Rules SUMMARY On April 13 and 17, 2018, the Federal Reserve, the OCC and the FDIC
More informationOCC Lending Limit Rules
OCC Issues Interim Final Rules Applying the Lending Limit for National Banks and Savings Associations to the Credit Exposure to Derivatives and Securities Financing Transactions SUMMARY On June 20, the
More informationCOBRADesk Same Day Clearance
FINRA Announces Optional Procedure for Same Day Clearance of Shelf Filings under Rule 5110 SUMMARY The FINRA Corporate Financing Department has created a Same Day Clearance Option that allows issuers and
More informationConcentration Limits on Large Financial Companies
Federal Reserve Approves Final Rule Implementing Dodd-Frank s Financial Sector Concentration Limit SUMMARY Last week, the Board of Governors of the Federal Reserve System (the Federal Reserve ) approved
More informationBasel III and FSB Proposals
G-20 Summit Endorses Basel Committee Proposals and Financial Stability Board Recommendations Regarding Systemically Important Financial Institutions SUMMARY At the conclusion of their summit meeting in
More informationSEC Exemptive Relief in Connection with Effective Date of Title VII of Dodd-Frank
SEC Exemptive Relief in Connection with Effective Date of Title VII of Dodd-Frank SEC Issues Interim Final Rules and Order to Provide Relief from Certain Provisions That Would Be Effective on July 16,
More informationBank Capital Plans and Stress Tests
Federal Reserve Board Proposes Rule Revising FR Y-14 Forms to Include CFO Attestation Requirements for Certain Large Bank Holding Companies SUMMARY On September 16, 2015, the Board of Governors of the
More informationImplementation of Title VII of Dodd-Frank
SEC Issues Proposed Rules to Mitigate Potential Conflicts of Interest in the Operation of Security-Based Swap Clearing Agencies, Security- Based Swap Execution Facilities and Security-Based Swap Exchanges
More informationProposed Dodd-Frank Section 943 Rules
SEC Proposes Disclosure Requirements Regarding Representations and Warranties in Asset-Backed Securities Offerings SUMMARY On October 4, 2010, the Securities and Exchange Commission proposed rules pursuant
More informationFailed Bank Acquisitions
FDIC Releases Revised Frequently Asked Questions on the Statement of Policy on Qualifications for SUMMARY On January 6, 2010, the Federal Deposit Insurance Corporation released Frequently Asked Questions
More informationConflicts of Interest in Securitizations
SEC Proposes Rule under Section 621 of the Dodd-Frank Act to Prohibit Securitization Participants from Engaging in Transactions Involving Material Conflicts of Interest with ABS Investors SUMMARY On September
More informationProposed Rules Under the Investment Advisers Act
Proposed Rules Under the Investment Advisers Act SEC Proposes Rules to Implement Dodd-Frank Act Registration Requirements for Advisers to Private Funds; Registration Exemptions for Venture Capital Funds,
More informationCommunity Reinvestment Act
Treasury Releases CRA Reform Recommendations Focused on Assessment Areas, Examination Clarity and Flexibility, Examination Processes, and CRA Performance SUMMARY On April 3, the U.S. Department of Treasury
More informationFederal Reserve Board Governor Tarullo Outlines Potential Regulatory Initiatives
Federal Reserve Board Governor Tarullo Outlines Potential Regulatory Initiatives SUMMARY On May 3, 2013, Federal Reserve Board Governor Daniel Tarullo delivered a speech outlining potential regulatory
More informationVolcker Rule. Agencies Release Limited Volcker Rule Guidance. June 10, 2014
June 10, 2014 Volcker Rule Agencies Release Limited Volcker Rule Guidance This afternoon, the Board of Governors of the Federal Reserve System (the Federal Reserve ), the Office of the Comptroller of the
More informationBank Capital Plans and Stress Tests
Approves Final Rule Amending Certain Aspects of Existing Capital Plan and Stress Test Rules SUMMARY Last Friday, the Board of Governors of the System approved a final rule (the Final Rule ) amending certain
More informationMandatory CFIUS Filings for Foreign Investment in Specified Critical Technologies Companies
Mandatory CFIUS Filings for Foreign Investment in Specified Critical Technologies Companies New Pilot Program Pursuant to Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) Will Require
More informationProposed Dodd-Frank Section 945 Rules
SEC Proposes Requirements Regarding Review of Assets Underlying Asset-Backed Securities Offerings and Disclosure of Findings and Conclusions SUMMARY On October 13, 2010, the Securities and Exchange Commission
More informationCorporate Disclosure of Government Enforcement Developments
Corporate Disclosure of Government Enforcement Developments U.S. District Court for the Southern District of New York Holds No General Duty for Issuers to Disclose SEC Investigations or Receipt of SEC
More informationNoncontrolling Investments in Banking Organizations
Noncontrolling Investments in Banking Organizations Federal Reserve Liberalizes Policy on Certain Aspects of Permissible Noncontrolling Equity Investments; Does Not Address Certain Structural Issues for
More informationSEC and CFTC Adopt Product Definitions Under Title VII of Dodd-Frank
SEC and CFTC Adopt Product Definitions Under Title VII of Dodd-Frank The SEC and CFTC Voted to Further Define Swap, Security-Based Swap, and Security-Based Swap Agreement and Finalize Related Requirements;
More informationProposed Regulations Would Greatly Expand Reach of ERISA Fiduciary Exposure
Proposed Regulations Would Greatly Expand Reach of ERISA Fiduciary Exposure Adoption Would Extend ERISA s Prudence and Conflict of Interest Rules to Those Providing Investment Advice to Employee Benefit
More informationProposed Assessment Rate Adjustment Guidelines for Large and Highly Complex Institutions
Proposed Assessment Rate Adjustment Guidelines for Large and Highly Complex Institutions FDIC Proposes New Assessment Rate Adjustment Guidelines for Large and Highly Complex Institutions in connection
More informationDelaware Chancery Court Considers Appraisal in First Major Decision Since Dell
Delaware Chancery Court Considers Appraisal in First Major Decision Since Dell Court of Chancery Chooses Unaffected Market Price, 30% Below Deal Price, as Fair Value. SUMMARY The evolution of Delaware
More informationIRS Finalizes Regulations Relating to Allocations of Partnership Items Involving Partners That Are Look-Through Entities
IRS Finalizes Regulations Relating to Allocations of Partnership Items Involving Partners That Are Look-Through Entities SUMMARY On May 19, 2008, the Internal Revenue Service issued final regulations on
More informationEmergency Economic Stabilization Act
Troubled Asset Relief Program and Related Measures Enacted into Law SUMMARY President Bush on Friday signed into law the of 2008 (the Act ). The Act seeks to restore stability and liquidity to the financial
More informationImplementation of Financial Services Regulatory Reform Legislation
Implementation of Financial Services Regulatory Reform Legislation Federal Reserve Official Previews Risk-Based Regulatory Tailoring Agenda SUMMARY On October 2, the Senate Banking Committee held a hearing
More informationCFTC Chairman Releases White Paper on Cross-Border Swaps Regulation Version 2.0
CFTC Chairman Releases White Paper on Cross-Border Swaps Regulation Version 2.0 White Paper Proposes New Approach to Providing Exemptions and Other Relief from CFTC s Dodd-Frank Swaps Rules for Certain
More informationRegulated Investment Companies
IRS Extends Guidance on Stock Distributions to Publicly-Traded SUMMARY On January 7, 2009, the Internal Revenue Service issued Revenue Procedure 2009-15 which extends to publicly-traded regulated investment
More informationNew York Department of Financial Services Addresses Use of External Consumer Data. and Information Sources in Underwriting for Life Insurance
New York Department of Financial Services Addresses Use of External Consumer Data and Information Sources in Underwriting for Life Insurance NYDFS Issues Circular Letter on the Use of External Consumer
More informationDelaware Supreme Court Reverses DFC Global Appraisal Decision
Delaware Supreme Court Reverses DFC Global Appraisal Decision Court Finds That Merger Price Following Robust, Conflict-Free Sale Process is the Best Evidence of Fair Value, and Rejects "Private Equity
More informationCorporate Expatriation Transactions
IRS and Treasury Issue Final Regulations on the Substantial Business Activities Exception to Section 7874 SUMMARY On June 3, 2015, the IRS and Treasury Department released final regulations (the Regulations
More information