Some employment related details on the legislation that’s now been sent to the Senate for a vote in the week or so:
- Corporate governance: The legislation gives shareholders a say on pay and proxy access, ensures the independence of compensation committees, and requires companies to set clawback policies to take back executive compensation based on inaccurate financial statements, seen as important steps in helping shift management’s focus from short-term profits to long-term growth and stability.
- Hedging rules: The SEC is directed to adopt rules requiring a company to disclose whether any employee or director is permitted to purchase financial instruments designed to hedge the market value of equity securities granted to the employee or director as part of his or her compensation.
- Executive compensation disclosure: The SEC is required to amend Item 402 of Regulation S-K to mandate disclosure of the median of the annual total compensation of all employees, except the CEO; the annual total compensation of the CEO; and the ratio of the two.
Update 7/16/10 — the bill passed the Senate with a 60-39 vote.