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Jul 15, 2016

Nasdaq Golden Leash Disclosure Rule Approved by SEC

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On July 1, 2016, the Securities and Exchange Commission (the “SEC”) approved a change to the Listing Rules of NASDAQ Stock Market LLC (“Nasdaq”). New Listing Rule 5250(b)(3) will require Nasdaq listed companies to publicly disclose payments made by third parties to any directors or director candidates in connection with their candidacy for, and/or their service on, company boards of directors.[1] These payments, commonly referred to as “golden leashes,” are often paid by activist shareholders to directors the activist was able to appoint to a company’s board. The new Listing Rule will be effective August 1, 2016, and company disclosures will be required when the company files a proxy statement for the next shareholders’ meeting at which directors are elected.

View full memo, Nasdaq Golden Leash Disclosure Rule Approved by SEC

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