Proposed Rule Would Require 13F Institutional Investment Managers to Report on How They Vote Proxies Related to Executive Compensation Matters

October 18, 2010

The SEC proposed a rule and certain amendments to SEC forms that would require an institutional investment manager that is subject to Section 13(f) of the Securities Exchange Act, including an investment company, to report annually how it voted proxies relating to executive compensation matters.


Under the proposed rules, public companies subject to the federal proxy rules would be required to:

  • provide their shareholders with an advisory vote on executive compensation and an advisory vote on the desired frequency of these votes;
  • provide shareholders with an advisory vote on compensation arrangements and understandings in connection with merger transactions, known as "golden parachute" arrangements; and
  • provide additional disclosure of "golden parachute" arrangements in merger proxy statements.

The proposed rules would require that institutional investment managers report their votes on executive compensation and "golden parachute" arrangements at least annually, unless the votes are otherwise required to be reported publicly by SEC rules.  Investment companies would make such reports on amended Form N-PX.

The proposed rule is required by Section 14A of the Securities Exchange Act, which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Comments on the proposed rule are due to the SEC by November 18, 2010.

Click here to access the release proposing the rule and form amendments.


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