SEC Provides Guidance on Executive Compensation Advisory Votes

The Securities and Exchange commission (SEC) provided guidance on executive compensation advisory votes that would comply with Exchange Act Rule 14a-21. In its Compliance and Disclosure Interpretations, the SEC gave examples of advisory vote descriptions that would be consistent with Rule 14a-21's requirement for shareholders to be given an advisory vote to approve the compensation paid to a company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K.

The four advisory vote descriptions, listed in Question and Answer 169.07, are:
  • To approve the company’s executive compensation
  • Advisory approval of the company’s executive compensation
  • Advisory resolution to approve executive compensation
  • Advisory vote to approve named executive officer compensation