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david_gordon

David Gordon

Managing Director, Los Angeles, CA

dina-bernstein

Dina Bernstein

Principal, Los Angeles, CA

andrew-r-lash

Andrew Lash

Consultant, San Francisco, CA

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October 10, 2019

Company Hedging Policies: Observations from New Proxy Disclosures

Alert | By David Gordon, Dina Bernstein, Andrew Lash

On December 18, 2018, the Securities and Exchange Commission (SEC) approved final rules requiring the disclosure of hedging policies in annual proxy statements. The rules, which became effective for proxy statements filed in fiscal years beginning on or after July 1, 2019, implement a Dodd-Frank mandate.

We reviewed the first 40 proxies that included the newly required disclosure (covering the period from August 23, 2019 to October 4, 2019) and observed the following about the companies we examined:

  • 100% have hedging policies in place;
  • 62% have hedging policies that cover directors and all employees;
  • 58% disclose policies that prohibit both transactions in company stock with a hedging function and derivative transactions generally; and
  • 60% include their hedging disclosure only in the Compensation Discussion & Analysis (CD&A) section of the proxy statement.
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david-gordonDavid Gordon
Managing Director

Dave Gordon’s practice as an executive compensation consultant stretches back over a decade. He has covered a variety of industries, including extensive experience with financial institutions and utilities. In addition to engagements for his own clients.

dina-bernsteinDina Bernstein
Principal

Dina Bernstein has extensive experience advising on all aspects of executive compensation, working with companies on an ongoing basis, as well as in the context of mergers and acquisitions, spin-offs, initial public offerings, and other corporate events. Dina provides guidance to private and public companies across various industries regarding cash and equity incentive compensation arrangements, employment, severance and change in control agreements, overall compensation program design, pay governance practices, taxation, stock exchange listing requirements and securities regulation compliance.

andrew-r-lashAndrew Lash
Consultant

Andrew Lash works with public and private companies across a variety of industries, consulting on executive and non-employee director pay practices and compensation program considerations in general.

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