The current global financial crisis, government bailouts and the ensuing contraction of the credit markets have led to calls for increased regulation and government oversight of Wall Street. The U.S. Senate weighed in on the debate when, on May 20, 2010, it passed the Restoring American Financial Stability Act of 2010 (the RAFSA).1 The RAFSA follows the December 2009 passage of the U.S. House of Representatives’ Wall Street Reform and Consumer Protection Act (the House bill).2 The process of reconciling the RAFSA and the House bill began on June 11, and the conferees expect to present legislation for President Obama’s signature before the July recess. Negotiations between House and Senate conferees over corporate governance provisions began on June 16. While the House bill contained far fewer corporate governance-related provisions, the base text of the bill used in legislative conference contains the same governance provisions provided for in the RAFSA.

This Legal Alert will summarize the RAFSA’s corporate governance and executive compensation provisions in anticipation of the release of the reconciled bill from conference, particularly in light of the negotiations already taking place on the provisions in conference. For example, the conferees appear to be eliminating provisions for mandatory majority voting for directors and appear to have rejected a proposal to mandate a non-binding shareholder vote on “golden parachute” packages. The analysis of the RAFSA corporate governance and executive compensation provisions in this Legal Alert will be described in the context of the broader movement for financial regulatory reform, including new and pending Securities and Exchange Commission (SEC) rules covering proxy disclosure and proxy access.