The amendment below to the Wall Street Reform Act has been passed. The amendment still needs to be signed into law but it requires (among other things) an Independent Compensation Committee. This will impact certain exchanges and will most certainly be tested as part of Sarbanes-Oxley controls.
June 21, 2010:
AGREED TO - EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
- Independent Compensation Committees: Standards for listing on an exchange will require that compensation committees include only independent directors and have authority to hire compensation consultants in order to strengthen their independence from the executives they are rewarding or punishing.
- No Compensation for Lies: Requires that public companies set policies to take back executive compensation if it was based on inaccurate financial statements that don't comply with accounting standards.
- SEC Review: Directs the SEC to clarify disclosures relating to compensation, including requiring companies to provide charts that compare their executive compensation with stock performance over a five-year period.