The Reform Act requires domestic issuers to provide shareholders with the right to cast a non-binding vote approving the issuer’s executive compensation as disclosed in its proxy statement at least once every three years. The say-on-pay vote covers the compensation of the issuer's named executive officers as disclosed in the annual proxy statement. The proposed rules did not provide for a specified format or wording for the say-on-pay proposal but do require issuers to disclose in the proxy statement that they are providing a separate shareholder vote on executive compensation and briefly explain the general effect of the vote.

The Reform Act provides that the say-on-pay vote must be held at least once every one, two or three years. Shareholders must also be given the opportunity, at least once every six years, to have a separate shareholder vote to re-determine the frequency of the say-on-pay vote. The proposed rules did not provide for a specified format or wording for the say-on-pay vote, but do require issuers to state that they are providing a separate shareholder advisory vote on the frequency of the say-on-pay vote and briefly explain the general effect of the vote. If an issuer's board of directors includes a recommendation on the frequency of the vote, the proxy statement must clearly state that shareholders are voting to approve the actual frequency and not the board of directors' recommendation. The proposed rules specify a format for the proxy card with respect to the frequency vote.

The Reform Act adds new disclosure requirements for payments made to named executive officers in connection with certain change in control transactions. Proposed new Item 402(t) to Regulation S-K specifies a tabular format for this disclosure. The aggregate dollar values of the following elements of compensation separately must be quantified in the seven columns of the table:

For disclosure made in connection with a corporate transaction, the amounts in the table are generally quantified assuming that the transaction occurred on the latest practicable date and using the closing price of the common stock on that date.

The Item 402(t) table is to be accompanied by narrative and footnote disclosure describing:

The proposed rules expand the list of transactions set forth in the Reform Act in which disclosure is required to include proxy and consent solicitations, registration statements on Forms S-4 and F-4, going private transactions, third-party tender offers and similar transactions.

The proposed rules require issuers to provide a separate shareholder advisory vote on the arrangements described pursuant to Item 402(t). The golden parachute vote is only applicable for proxy and consent solicitations and not the additional transactions described above. The golden parachute vote is only required for compensation paid by the target issuer to its named executive officers.

Compensation and arrangements are not subject to the golden parachute vote if they were subject to a prior general say-on-pay vote. In order to take advantage of this exemption, an issuer must have voluntarily included disclosure regarding the change in control arrangements in its annual meeting proxy statement in accordance with Item 402(t). In the event that compensation arrangements that were not subject to a prior say-on-pay vote were in place at the time of a transaction, issuers would need to segregate the required disclosure in two tables meeting the requirements of Item 402(t) showing the total amounts payable under all arrangements and just those new arrangement subject to the current vote.

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