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House committee passes “say-on-pay” exemption for IPO companies

Posted in Dodd-Frank Act, Say-on-Pay/Say-on-Frequency

As Ted Allen notes in ISS’s Insight blog, the House financial services committee voted last week to approve a bill (HR 3606) that would exempt so-called “emerging growth companies” (i.e., non-large accelerated filers with less than $1 billion in annual revenues) from say-on-pay and say-on-golden-parachute requirements during such companies’ first five years after going public.  The bill would also exempt such companies during the same period from the “pay versus performance” and “pay ratio” disclosures required under the Dodd Frank Act. 

The bill would also make a number of changes to non-compensation related requirements for such companies during the same five-year period, including loosening certain financial disclosure and auditing requirements under the Sarbanes Oxley Act.

The bill has over 50 sponsors or cosponsors in the House and passed the financial services committee by a vote of 54-1.  Sen. Schumer has introduced an identical bill (S. 1933) in the Senate.