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On February 13, 2012, the SEC released new CD&I 169.07, which provides guidance on appropriate descriptions of the say-on-pay advisory vote required by Rule 14a-21 under the Exchange Act.  CD&I 169.07 provides examples of proxy card advisory vote descriptions that would and would not be “consistent with Rule 14a-21’s requirement for shareholders to be given an advisory vote to approve the compensation paid to a company’s named executive officers.”

The following example is not a permissible description:

  • To hold an advisory vote on executive compensation

The SEC points out that this description could cause a shareholder to think they were only voting on whether to hold an advisory vote on executive compensation.  The SEC provides three examples of advisory vote descriptions that it deems sufficiently clear:

  • To approve the company’s executive compensation
  • Advisory approval of the company’s executive compensation
  • Advisory resolution to approve executive compensation
  • Advisory vote to approve named executive officer compensation

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