The final version of the financial reform bill1 adopted by the Senate last week included a number of corporate governance and executive compensation provisions that would apply to all U.S. public companies. The Senate bill will now need to be reconciled with the corresponding bill adopted late last year by the House of Representatives,2 but it appears likely that most of these provisions will remain in the final legislation in some form. The House-Senate Conference Committee that intends to propose a final bill before July 4, 2010, will be led by Representative Barney Frank, the primary author of the House bill, and will include Senators Christopher Dodd, Blanche Lincoln, Richard Shelby and Saxby Chambliss.3
Corporate Governance
The corporate governance provisions of the Senate bill primarily address four issues: mandatory proxy access, majority voting requirements, separation of the positions of chairman of the board and chief executive officer (CEO), and broker discretionary voting. Many of these provisions appear in similar form in the House bill. Importantly, the final version of the Senate bill does not include any limitation on public companies having staggered boards absent shareholder approval or ratification as had been proposed by Senator Charles Schumer in the Shareholder Bill of Rights Act of 2009.4 Similarly, the House bill has no limitation on staggered boards.
