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Polsinelli Shughart PC Corporate Finance and Securities in the News
Corporate Finance and Securities Attorneys

William W. Mahood III
Practice Area Chair

Kelly Sullivan-Deady
Practice Area Vice Chair

Orren S. Adams
Charles R. Berry
Ryan A. Berry
Paul J. Cambridge
Ruben K. Chuquimia
Michael J. Connell
Geoffrey D. Fasel
Donald E. Figliulo
Evan M. Gilbert
Tracey M. Ginn
Phillip P. Guttilla
Larry K. Harris
Darren R. Hensley
Scott M. Herpich
Andrew T. Hoyne
Joseph M. Jarvis
Paul G. Klug
Gregory M, Kratofil, Jr.
Cortney E. Mendenhall
Donna Mo
Brian K. Moll
Sharon R. Nowakowski
Michael F. Patterson
Clifford R. Pearl
Jay E. Pietig
William E. Quick
Ronald G. Rossi
William M. Schutte
Kevin R. Sweeney
Robert H. Wexler
Andrew M. Wilcox
Eric S. Wu


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July 2012


In the News

SEC Adopts New Listing Standard Requirements for Compensation Committees and Disclosures Requirements for Compensation Advisers


On June 20, 2012, the United States Securities and Exchange Commission adopted new Rule 10C-1 under the Securities Exchange Act of 1934 (the “Exchange Act”) and adopted an amendment to its existing proxy disclosure rules.  Rule 10C-1 requires national securities exchanges, such as the New York Stock Exchange, and FINRA on behalf of the NASDAQ Stock Market (collectively, the “Exchanges”), to establish listing standards that, among other things:

  • Provide independence standards for compensation committee members or board of director members responsible for performing the functions generally allocated to compensation committees
  • Require each member of an issuer’s compensation committee to be a member of such issuer’s board of directors and to satisfy the applicable Exchange’s new independence standards for compensation committee members
  • Require compensation committees to consider six independence factors relating to any compensation consultants, independent legal counsel or other advisers they seek to retain (which the SEC refers to collectively as “Compensation Advisers”)
  • Establish the compensation committee as being responsible for the appointment, compensation and oversight of Compensation Advisers

The amendment to the existing proxy disclosure rules requires disclosures relating to any conflicts of interests that arise as a result of the services provided by Compensation Advisers.  The new rule and amendment implement Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 10C to the Exchange Act.  This provision of the Dodd-Frank law is aimed at enhancing corporate accountability to shareholders for executive compensation practices.


The Exchanges are required to provide the SEC with revised listing standards that comply with Rule 10C-1 by September 25, 2012 and each Exchange must receive SEC approval of the final version of its listing standards by July 27, 2013.  The new proxy disclosures relating to Compensation Adviser conflicts of interest must be included in proxy or information statements for shareholder meetings at which directors are to be elected occurring on or after January 1, 2013.  To read more about the rule and the amendment, click here.

For More Information

If you have questions about this SEC initiative, please contact the authors of this Alert, or another member of Polsinelli Shughart’s Corporate Finance practice group.


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