Section 954 Dodd Frank

By steve quinlivan july 2 2015.

Section 954 dodd frank. The sec has proposed new rules to implement section 954 of the dodd frank act which added section 10d to the securities exchange act of 1934. Dodd frank section 954 of the act requires national securities exchanges to adopt rules as directed by the sec which rules will require issuers to develop and implement a policy providing. On july 1 2015 the commission proposed rules regarding recovery of executive compensation to implement section 954 of the dodd frank act.

July 8 2015 on july 1 2015 in a 3 2 vote the sec proposed a ruleimplementing section 954 of the dodd frank act which requires listed companies to implement clawback policies to recover incentive based compensation received by current or former executive officers in the event of certain financial restatements. Section 954 of the 2010 dodd frank act will when implemented require issuers with securities listed on a national exchange to create and enforce an excess pay clawback. These provisions require the sec to create regulations that must be adopted by national stock exchanges which in turn require publicly traded companies who wish to be listed on the exchange to have clawback policies.

Todd scott and ken herzinger posted on september 27 2013 executive compensation decisions are core functions of a board of directors and absent unusual circumstances are protected by the business judgment rule. Further section 956 prohibits regulators and financial institutions from allowing any incentive based compensation arrangements that might cause the financial institution to suffer a material financial loss. For purposes of section 954 c 3 a of the internal revenue code of 1986 any dividends received by a qualified controlled foreign corporation within the meaning of section 951 of such code during any of its 1st 5 taxable years beginning after december 31 1986 with respect to its 32 7 percent interest in a brazilian corporation shall be treated as if such brazilian corporation were a related person to the qualified controlled foreign corporation to the extent the brazilian corporation.

Dodd frank act 954 dfa 954 requires the securities and exchange commission to direct national securities exchanges to prohibit the listing of any security of a company that fails to adopt a policy in compliance with rules to be issued by the sec under 954 for clawing back excess incentive pay. Section 954 requires public companies to adopt clawback policies that recover executive compensation made on the basis of erroneous and noncompliant financial statements. Dodd frank act section 954 how much latitude do directors have in setting executive compensation.