A 2017 Proxy Season Reminder: Form 8-K Disclosure Of Decision On Frequency Of Say-On-Pay Votes - Corporate/Commercial Law - Mexico Law Articles in English - Mondaq Business Briefing - Books and Journals - VLEX 686157849

A 2017 Proxy Season Reminder: Form 8-K Disclosure Of Decision On Frequency Of Say-On-Pay Votes

Author:Mr Jeffrey N. Ostrager, Valarie A. Hing, Raymond T. Hum and George Zaras
Profession:Curtis, Mallet-Prevost, Colt & Mosle S.C.

For most public companies, the 2017 proxy season marks the sixth year since they last held a shareholder advisory vote to determine how often to hold their say-on-pay vote (also known as a "say-on-frequency" vote). Under Rule 14a-21(b) of the Securities Exchange Act of 1934 (Exchange Act), public companies subject to the proxy rules of the U.S. Securities and Exchange Commission (SEC) are required, at least once every six years, to hold a shareholder advisory vote on whether their say-on-pay vote should be held every one, two or three years. As most public companies were required to hold their initial say-on-frequency vote during the 2011 proxy season, they are required to hold another say-on-frequency vote during the 2017 proxy season.

After holding their initial say-on-frequency vote in 2011, many public companies inadvertently failed to comply with Item 5.07(d) of Form 8-K, which requires disclosure of the company's decision, in light of say-on-frequency vote results, on whether the say-on-pay vote should occur every one, two or three years. Because the say-on-frequency vote is merely an "advisory" vote, public companies are effectively required to take the additional step of deciding on the frequency of their say-on-pay vote after considering say-on-frequency vote results. While Item 5.07(d) of Form 8-K provides that disclosure of the company's frequency decision must be made no later than 150 calendar days after the annual meeting and no later than 60 calendar days prior to the deadline for submission of shareholder proposals for the next annual meeting, most companies...

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