A year ago, we published an article in this publication entitled “Executive Compensation: Under Fire and What’s to Come,” which summarized the then-current landscape of executive compensation legislation and regulation. Since then, in almost every Congressional session, legislation has been proposed and debated to restrict executive compensation or regulate corporate governance in one form or another.
The culmination of all such legislation led to the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama on July 21, 2010. Although the majority of the act focuses on the regulation of financial institutions, there are provisions in the act that regulate executive compensation and corporate governance that apply to most publicly traded companies (as smaller companies are exempt from some provisions). Certain of these provisions may have a significant effect on executive compensation in the future.
