Important New SEC Guidance on the Proper Wording of Say on Pay Proposals on the Proxy Card

Executive Compensation Blog

As highlighted in Broc’s Blog this morning, yesterday the SEC Division of Corporation Finance published a new “Compliance and Disclosure Interpretation” (CDI) regarding the proper wording of Say on Pay proposals on the proxy card, which reads as set forth below. Please note this change.

Question 169.07

Question: On its proxy card and voting instruction form, how should a company describe the advisory vote to approve executive compensation that is required by Exchange Act Rule 14a-21?

Answer: The following are examples of advisory vote descriptions that would be consistent with Rule 14a-21’s requirement for shareholders to be given an advisory vote to approve the compensation paid to a company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K.

  • To approve the company’s executive compensation
  • Advisory approval of the company’s executive compensation
  • Advisory resolution to approve executive compensation
  • Advisory vote to approve named executive officer compensation


The following is an example of an advisory vote description that would not be consistent with Rule 14a-21 because it is not clear from the description as to what shareholders are being asked to vote on. Shareholders could interpret this example as asking them to vote on whether or not the company should hold an advisory vote on executive compensation, rather than asking shareholders to actually approve, on an advisory basis, the compensation paid to the company’s named executive officers.

  • To hold an advisory vote on executive compensation


*Emphasis added

Executive Compensation Blog


This entry has been created for information and planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts.