The U.S. Securities and Exchange Commission Monday proposed rules that require companies to hold advisory votes on executive compensation and “golden parachute” arrangements.

Under the proposed rules, which are part of the SEC’s implementation of the regulatory reform bill passed earlier this year, public companies that are subject to the federal proxy rules would be required to provide their shareholders with:

> an advisory vote on executive compensation and an advisory vote on the desired frequency of these votes;

> an advisory vote on “golden parachute” arrangements; and

>additional disclosure of “golden parachute” arrangements in merger proxy statements.

The proposed rules would also require that institutional investment managers report their votes on executive compensation and “golden parachute” arrangements annually.

Last year, the SEC adopted rules requiring public companies that took money under the federal government’s Troubled Asset Relief Program to provide a shareholder vote on executive pay. The proposed rules contemplate requiring firms to hold these votes at least every three years beginning with the first annual shareholders’ meeting taking place on or after Jan. 21, 2011.

The SEC’s proposal also requires companies to provide disclosure about the say-on-pay vote in the annual proxy statement, including whether the vote is non-binding. The proposal also would require the company to disclose whether, and if so, how companies have considered the results of previous say-on-pay votes.

The SEC will seek public comment on the proposals. The comment period will close on November 18.

IE