June 6, 2006
The Securities and Exchange Commission (“SEC”) has proposed significant changes to its rules governing executive compensation and related party disclosure. Comments to the SEC’s proposed rules were due April 10, 2006. To date, the SEC has received close to 20,000 letters commenting on its proposed rules; and, although the SEC’s proposed rules will be modified in response to these comments, the adoption of final rules significantly altering executive compensation and related person disclosure to be effective in time for the 2007 proxy season would appear absolute . Companies should be evaluating their board of directors and committee policies and objectives with respect to executive and director compensation and related party transactions to determine what, if anything, they should be doing in anticipation of the 2007 proxy season.
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