The U.S. Securities and Exchange Commission Wednesday proposed a series of rule amendments designed to improve corporate governance and bolster investor confidence.

The U.S. regulator’s proposals would require companies that receive federal bailout money under the Troubled Asset Relief Program to provide a shareholder vote on executive pay in their proxies.

The SEC also proposed a set of rule revisions intended to improve disclosure in proxy statements, including information about:

• the relationship of a company’s compensation policies to risk;
• the qualifications of directors, executive officers and nominees; corporate leadership structure; and
• potential conflicts of interests of compensation consultants.

It also proposed changes to improve the reporting of annual stock and option awards to company executives and directors; to require quicker reporting of election results; and, amendments to the proxy rules intended to clarify how they operate.

Finally, the commission voted to approve an NYSE proposal that would eliminate broker discretionary voting for all elections of directors, whether contested or not. A change that the SEC says is, “designed to enhance corporate governance and accountability by helping assure that investors with an economic interest in the company vote on the election of directors. It also would address concerns that broker discretionary voting for directors has impacted election results.”

“With over 800 billion shares being voted annually at over 7,000 company meetings, it is imperative that our proxy voting process work — starting with the quality of disclosure and continuing through to the integrity of the vote results,” said SEC chairman Mary Schapiro. “These three items considered today are all related to the fundamental goal of enhancing the quality of the system through which shareholders exercise their franchise.”

Comments on the proposed changes are due in 60 days.

The NYSE’s proposal will apply to shareholder meetings held after Jan. 1, 2010.

IE