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Mar 13, 2012

Consequences of Failures to Make Say-on-Pay Frequency Disclosures on Form 8-K

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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"

Authors and Contributors

John J. Cannon III

Partner

Compensation, Governance & ERISA

+1 212 848 8159

+1 212 848 8159

New York

Kenneth J. Laverriere

Partner

Compensation, Governance & ERISA

+1 212 848 8172

+1 212 848 8172

New York

Doreen Lilienfeld

Partner

Compensation, Governance & ERISA

+1 212 848 7171

+1 212 848 7171

New York

Linda Rappaport

Of Counsel

Compensation, Governance & ERISA

+1 212 848 7004

+1 212 848 7004

New York

Stephen T. Giove

Partner

Capital Markets

+1 212 848 7325

+1 212 848 7325

New York

Lisa Jacobs

Partner

Capital Markets

+1 212 848 7678

+1 212 848 7678

New York