SEC Approves Nasdaq, NYSE Corporate Governance Rules
After more than a year of discussions and numerous revisions, the SEC approved this week the corporate governance rules proposed in October by Nasdaq and NYSE.
The new rules require listed companies to have a majority of independent directors. Under the NYSE rules, a director who receives, or whose immediate family member receives, more than $100,000 in direct compensation a year is not independent. However, under the Nasdaq rules, directors are not independent if they or their family members received more than $60,000 in payments from the company in the current or past three fiscal years other than director compensation, loans permitted under Sarbanes-Oxley Act and Federal Reserve Regulation O, compensation paid to a family member who is a non-executive employee, or benefits under tax-qualified plans.
Some bankers have expressed concerns that the Nasdaq exemptions are not broad enough. While the rules exempt loan proceeds permitted under Reg O, they do not exempt payments received by a director or a director's family members from other kinds of banking transactions in the ordinary course of business. For example, maturing CD payments and trust payments are not included. ICBA intends to express its concerns to Nasdaq with the hope that they will issue an interpretation providing a broader exemption.