On February 13, 2012, the SEC's Division of Corporation Finance issued a new compliance and disclosure interpretation (C&DI) on Rule 14a-21 under the Exchange Act. Question 169.07 offers examples of how a company should describe the advisory vote to approve executive compensation on its proxy card and voting instruction form that are consistent with the requirements of Rule 14a-21. The SEC staff emphasized that a vote description should make clear that shareholders are being asked to actually approve, on an advisory basis, the compensation paid to the company's named executive officers. The SEC staff does not find "to hold an advisory vote on executive compensation" to be an adequate description of a say on pay proposal because it does not believe this language is clear about what shareholders are being asked to vote on.

To learn more about proxy cards and say on pay proposals, see Practice Note, Proxy Statements.