15 USC 78n-1 - Shareholder approval of executive compensation

U.S Code last checked for updates: Feb 21, 2025

§ 78n–1.

Shareholder approval of executive compensation

(a)

Separate resolution required

(1)

In general

(2)

Frequency of vote

(3)

Effective date

The proxy or consent or authorization for the first annual or other meeting of the shareholders occurring after the end of the 6-month period beginning on July 21, 2010, shall include—

(A)

the resolution described in paragraph (1); and

(B)

a separate resolution subject to shareholder vote to determine whether votes on the resolutions required under paragraph (1) will occur every 1, 2, or 3 years.

(b)

Shareholder approval of golden parachute compensation

(1)

Disclosure

(2)

Shareholder approval

(c)

Rule of construction

The shareholder vote referred to in subsections (a) and (b) shall not be binding on the issuer or the board of directors of an issuer, and may not be construed—

(1)

as overruling a decision by such issuer or board of directors;

(2)

to create or imply any change to the fiduciary duties of such issuer or board of directors;

(3)

to create or imply any additional fiduciary duties for such issuer or board of directors; or

(4)

to restrict or limit the ability of shareholders to make proposals for inclusion in proxy materials related to executive compensation.

(d)

Disclosure of votes

(e)

Exemption

(1)

In general

(2)

Treatment of emerging growth companies

(A)

In general

(B)

Compliance after termination of emerging growth company treatment

An issuer that was an emerging growth company but is no longer an emerging growth company shall include the first separate resolution described under subsection (a)(1) not later than the end of—

(i)

in the case of an issuer that was an emerging growth company for less than 2 years after the date of first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933 [15 U.S.C. 77a et seq.], the 3-year period beginning on such date; and

(ii)

in the case of any other issuer, the 1-year period beginning on the date the issuer is no longer an emerging growth company.

(June 6, 1934, ch. 404, title I, § 14A, as added Pub. L. 111–203, title IX, § 951, July 21, 2010, 124 Stat. 1899; amended Pub. L. 112–106, title I, § 102(a)(1), Apr. 5, 2012, 126 Stat. 308.)

cite as: 15 USC 78n-1