(a) Separate resolution required.
(1) In general. Not less frequently than once every 3 years, a proxy or consent
or authorization for an annual or other meeting of the shareholders
for which the proxy solicitation rules of the Commission require compensation
disclosure shall include a separate resolution subject to shareholder
vote to approve the compensation of executives, as disclosed pursuant
to section 229.402 of title 17, Code of Federal Regulations, or any
successor thereto.
(2) Frequency of vote. Not less frequently
than once every 6 years, a proxy or consent or authorization for an
annual or other meeting of the shareholders for which the proxy solicitation
rules of the Commission require compensation disclosure shall include
a separate resolution subject to shareholder vote to determine whether
votes on the resolutions required under paragraph (1) will occur every
1, 2, or 3 years.
(3) Effective date. The proxy or consent or
authorization for the first annual or other meeting of the shareholders
occurring after the end of the 6-month period beginning on the date
of enactment of this section shall include—
(A) the resolution
described in paragraph (1); and
(B) a separate resolution subject to
shareholder vote to determine whether votes on the resolutions required
under paragraph (1) will occur every 1, 2, or 3 years.
(b) Shareholder
approval of golden parachute compensation.
(1) Disclosure. In any proxy or consent solicitation material (the solicitation
of which is subject to the rules of the Commission pursuant to subsection
(a)) for a meeting of the shareholders occurring after the end of
the 6-month period beginning on the date of enactment of this section,
at which shareholders are asked to approve an acquisition, merger,
consolidation, or proposed sale or other disposition of all or substantially
all the assets of an issuer, the person making such solicitation shall
disclose in the proxy or consent solicitation material, in a clear
and simple form in accordance with regulations to be promulgated by
the Commission, any agreements or understandings that such person
has with any named executive officers of such issuer (or of the acquiring
issuer, if such issuer is not the acquiring issuer) concerning any
type of compensation (whether present, deferred, or contingent) that
is based on or otherwise relates to the acquisition, merger, consolidation,
sale, or other disposition of all or substantially all of the assets
of the issuer and the aggregate total of all such compensation that
may (and the conditions upon which it may) be paid or become payable
to or on behalf of such executive officer.
(2) Shareholder
approval. Any proxy or consent or authorization relating to the
proxy or consent solicitation material containing the disclosure required
by paragraph (1) shall include a separate resolution subject to shareholder
vote to approve such agreements or understandings and compensation
as disclosed, unless such agreements or understandings have been subject
to a shareholder vote under subsection (a).
(c) Rule of construction. The shareholder
vote referred to in subsections (a) and (b) shall not be binding on
the issuer or the board of directors of an issuer, and may not be
construed—
(1) as overruling a decision
by such issuer or board of directors;
(2) to create or imply any change to the
fiduciary duties of such issuer or board of directors;
(3) to create or imply any
additional fiduciary duties for such issuer or board of directors;
or
(4) to restrict or
limit the ability of shareholders to make proposals for inclusion
in proxy materials related to executive compensation.
(d) Disclosure of votes. Every institutional investment manager subject to section 13(f)
shall report at least annually how it voted on any shareholder vote pursuant
to subsections (a) and (b), unless such vote is otherwise required
to be reported publicly by rule or regulation of the Commission.
(e) Exemption.
(1) In general. The Commission may, by rule or order, exempt any other issuer or
class of issuers from the requirement under subsection (a) or (b).
In determining whether to make an exemption under this subsection,
the Commission shall take into account, among other considerations,
whether the requirements under subsections (a) and (b) disproportionately
burdens small issuers.
(2) Treatment of emerging growth companies.
(A) In general. An emerging growth company shall be exempt from the requirements
of subsections (a) and (b).
(B) Compliance
after termination of emerging growth company treatment. An issuer
that was an emerging growth company but is no longer an emerging growth
company shall include the first separate resolution described under
subsection (a)(1) not later than the end of—
(i) in the case
of an issuer that was an emerging growth company for less than 2 years
after the date of first sale of common equity securities of the issuer
pursuant to an effective registration statement under the Securities
Act of 1933, the 3-year period beginning on such date; and
(ii) in the case of any other
issuer, the 1-year period beginning on the date the issuer is no longer
an emerging growth company.
[15
USC 78n-1. As added by act of July 21, 2010 (124 Stat. 1899) and amended
by act of April 5, 2012 (126 Stat. 308).]
