For today’s blog entry, I discuss a few recent and upcoming securities law developments.
Last year, the SEC issued a concept release seeking feedback on possible modernizations to Rule 701 and Form S-8. Their suggestions included expanding both frameworks to cover securities issued to gig economy workers, allowing companies to register all plans on a single Form S-8, or eliminating Form S-8 altogether and instead allowing public companies to rely on Rule 701.
Now, this project is included in the SEC’s Spring 2019 Reg Flex Agenda, which means we could see proposed rules on this before the year is out. In the NASPP’s comment letter on the concept release, we offered some nifty suggestions for Form S-8 that I think would make our members’ lives a lot easier while still accomplishing the SEC’s objectives. I am curious to know if the SEC will take any of our suggestions.
You bet! We’re still waiting for final rules for at least two sections of Dodd-Frank: the pay-for-performance disclosures and the directive for exchanges to require listed companies to implement clawback policies that apply when financials are restated. These projects are still on the SEC’s long-term agenda, which I assume means we aren’t going to see the final rules anytime soon. Dodd-Frank was partisan legislation (only 4 Republicans voted for it and only 2 Democrats voted against it), so we may not see final rules until we have a Democratic administration.
Completely unrelated to Rule 701 and Form S-8, the SEC has proposed amendments to the definition of accelerated filer and large accelerated filer that would do the following:
Confused? So am I. This memo from Morrison & Foerster does a much better job than me of explaining what the proposed rules are. Maybe once the rules are final, someone will make a flow chart to help us non-lawyers figure them out.
Proposed Section 162(m) Regs: Clawbacks
As I blogged last week, the IRS has Read More
Insider Trading: Would You Sell Your Career for $100,000?
I’ve followed the topic of insider trading over many seasons and SEC enforcement actions, and the one thing that I probably find most fascinating is the “who” becomes entangled...Read More
Implementing an Auto Exercise Program for Stock Options
Companies that grant stock options know that there are a few core challenges that have maintained their existence throughout the life span of these types of arrangements. Among them: how to handle ...Read More
Is Spousal Consent Necessary for Equity Awards?
Occasionally, I am asked if it is necessary for employees’ spouses to accept the equity awards granted to employees, in addition to the employees’ acceptance. In my experience, ...Read More
Hertz’s Quest for $70 Million in Clawbacks
In what is considered a rare in the world of clawbacks to date, rental-car company, Hertz, made recent headlines when they filed a complaint seeking to recover $70 million in incentive payments to ...Read More