Taking its cues from the Dodd-Frank Act, the Securities and Exchange Commission last week proposed rules to strengthen the independence of board members who serve on compensation committees and to curb conflicts of interest with compensation advisers. The details of those rules, however, it is leaving to U.S. stock exchanges to write.
“The SEC closely tracked the language of the Dodd-Frank Act, and instead of giving us more guidance, what it essentially did was punt most of the decision making to the exchanges,” says Deborah Lifshey, managing director at Pearl Meyer & Partners, a compensation consulting firm. “The SEC tends to be a little but more stringent in its rulemaking, and the exchanges a little bit less so. By leaving it to the exchanges, it probably won’t be as aggressive as if the SEC had given us specific guidance.”
