Washington Post Interview with SEC Chairman Donaldson

By: Cydney Posner

You might be interested in this interview with SEC chairman William Donaldson that appeared yesterday in the Washington Post. In the interview, Donaldson said that he was prepared to move forward this year with the SEC's shareholder proxy access proposal, even without a unanimous vote by all SEC commissioners. He expressed the view that "striving to have a unanimous vote on something almost spells going down to the lowest common denominator or not getting anything." Donaldson said he supports the broad outlines of a plan that would be triggered when more than 50% of shareholders withhold their votes from a board candidate. One rumored compromise would require that management propose a new candidate, with input from dissatisfied investors, the following year. The U.S. Chamber of Commerce has threatened to sue if the SEC goes forward with the proxy access proposal.

Donaldson also said that the SEC is considering updates to the executive compensation disclosure rules, requiring more detailed information about complex items, such as long-term compensation packages: "As far as salaries and compensation are concerned, there remains obfuscation about who's being paid what...." Donaldson reaffirmed his intent to employ the "bully pulpit" of his office to urge board members to set aside recommendations from high-priced compensation consultants for higher executive compensation and instead focus on new, more practical ways to measure executive performance. He did, however, reject the idea that the SEC would interfere in companies' actual pay decisions.

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