The Dodd-Frank Act requires issuers to provide shareholders with the opportunity to vote on whether the issuer’s “say-on-pay” advisory vote will occur every one, two or three years. As with the say-on-pay vote itself, the frequency vote is merely advisory and not binding on the issuer. Consequently, once the votes are tallied, issuers must consider what frequency they will adopt. The frequency decision must be disclosed by an issuer under Item 5.07 of Form 8-K. In the 2011 proxy season, many issuers simply “forgot” this requirement. The results of a failure to file a Form 8-K can affect an issuer's ability to use registration statements on Forms S-3 and S-8 and potentially put the issuer in default under loan and other agreements.View full memo, "Consequences of Failures to Make Say-on-Pay Frequency Disclosures on Form 8-K"
