KMK Law Corporate & Securities Blog

Institutional Investor Services (ISS) recently announced that it will be launching GRId 2.0 on February 20, 2012.  GRId, or Governance Risk Indicators, is ISS’s rating system for publicly-traded companies’ corporate governance practices which ISS  wants us to believe is designed to measure publicly-traded companies’ governance-related risk.  

On September 6, 2011, the Securities and Exchange Commission released a statement that it would not seek rehearing of the decision by the U.S. Court of Appeals for the District of Columbia circuit in the case captioned Business Roundtable and U.S. Chamber of Commerce vs. Securities and Exchange Commission or seek review of the decision by the U.S. Supreme Court. The decision vacated new proxy access Rule 14a-11, which would have required companies to include shareholders' director nominees in company proxy materials under certain circumstances.

On July 22, 2011, the United States Court of Appeals for the District of Columbia Circuit handed down a decision in the case captioned Business Roundtable and U.S. Chamber of Commerce vs. Securities and Exchange Commission, which vacates new proxy access Rule 14a-11, and related amendments to Rule 14a-8 on shareholder proposals.

Code Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") precludes a tax deduction for remuneration paid to certain employees of publicly held companies in excess of $1,000,000.  On June 23, 2011 the IRS issued proposed regulations under Code Section 162(m) to clarify two provisions of existing treasury regulations. 

On May 25, 2011, over a month after its scheduled release date, the SEC adopted rules to implement Section 21F of the Exchange Act, "Securities Whistleblower Incentives and Protection," which was added by Section 922 of Dodd-Frank. 

The SEC recently proposed rules to revise its definition of "Accredited Investor" so that it mirrors the definition adopted by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the proposed rules, a person is no longer permitted to include the value of his or her primary residence in determining whether they meet the $1 million net worth requirement for an Accredited Investor. The proposed rules do not define "primary residence," but do say that, for the most part, the common meaning of "the home where a person lives most of the time" should be used, whereas, in complex cases, the federal income tax rules should be consulted for guidance.

On January 25, 2011, the Securities and Exchange Commission ("SEC") adopted final "Shareholder Approval of Executive Compensation and Golden Parachute Compensation" rules, which are effective for annual meetings of shareholders conducted on or after January 21, 2011. Also known as "Say-on-Pay," the final rules address three separate shareholder votes mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act and several proxy disclosures surrounding these votes. Click here for our firm's complete advisory.