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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
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