Dodd-Frank Executive Compensation Rules Still Delayed

May 15, 2018

For the last eight years, the Securities and Exchange Commission (“SEC”) has been working to finish the Dodd-Frank Act’s executive compensation rules. Based on recent comments by William Hinman, the rules are far from being completed. Speaking on April 26 before the House Financial Services Committee’s Capital Markets subcommittee, the director of the agency’s Division of Corporation Finance said the executive compensation rules would not be finished this fiscal year.

Minnesota Rep. Keith Ellison pressed Hinman about why the SEC is taking so long to complete the executive compensation rules. During his questioning, Ellison referenced unfinished rules on clawbacks (Release No. 33-9861, Listing Standards for Recovery of Erroneously Awarded Compensation) and incentive-based compensation arrangements (Release No. 34-7776, Incentive-Based Compensation Arrangements). Other incomplete proposed disclosures include pay-versus-performance and hedging.

In response, Hinman said the SEC is focused on completing its short-term agenda. He also noted that SEC chairman Jay Clayton will ask staff members to complete the unfinished rules in successive order, but not by the end of 2018 or early next year.