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In this memo, Cleary Gottlieb gives us this news:

On November 26, 2013, the Nasdaq Stock Market filed a proposal to amend its listing rules implementing Rule 10C-1 of the Securities Exchange Act of 1934, governing the independence of compensation committee members. Currently, Nasdaq Listing Rule 5605(d)(2)(A) and IM-5605-6 employ a bright line test for independence that prohibits compensation committee members from accepting directly or indirectly any consulting, advisory or other compensatory fees from the company or any subsidiary subject to certain exceptions.

Based on the potential burden the bright line approach places on companies’ ability to recruit eligible directors, Nasdaq has proposed to replace this rule and its exceptions with a requirement that all compensation received from a company be considered in the independence determination. Separately, Nasdaq has also proposed some minor revisions to the affiliation prong of the compensation committee independence test under Rule 10C-1, which requires that consideration be given in independence determinations to whether a compensation committee member is affiliated with the issuer, a subsidiary of the issuer or an affiliate of a subsidiary of the issuer. All of these changes would align Nasdaq’s approach to compensation committee independence with that employed by the NYSE.

Yesterday, Mike Melbinger blogged a reminder that the Nasdaq has provided a preview of its form of certification (see pg. 16) for listed companies to use when it complies with Nasdaq Rule 5605(d) next year; the Nasdaq will be releasing the final form sometime in early January…

Say-on-Pay: Now 71 Failures – How Does That Compare With My Early Season Poll?

Last month, DFC Global became the 66th company to fail its say-on-pay in ’13 with just 26% support – see the Form !0-Q. DFC Global has failed two years in a row (last year with 25% support). And these five companies became first-time failures – #67-71: Gigoptix with 39% support (Form 8-K); Corinthian Colleges with 48% support (Form 8-K); CytoDyn with 43% support (Form 8-K); Fusion-io with 36% support (Form 8-K) and SWS Group with 48% support (Form 8-K). Thanks to Karla Bos for these as always!

Here are poll results from earlier this year in which readers predicted the number of say-on-pay votes that would fail to garner majority support in ’13 (here are results of 2012’s predictions):

– 10 or fewer failures – 7%
– 11-20 – 5%
– 21-30 – 15%
– 31-40 – 10%
– 41-50 – 22%
– 51-75 – 27%
– More than 75 – 15%

Check out this blog by Davis Polk’s Ning Chiu about how say-on-pay fared – Ning notes that of the 995 equity incentive plans voted on, ISS supported 73%, but ultimately only 8 plans did not pass.

Take Two Video: “Say-on-Pay in 2013”

Here is a 45-second video about the success rates for say-on-pay over the past three years:

– Broc Romanek