Public Companies Update – One-Minute Reads
Nominees for SEC commissioner
On April 6, President Joe Biden announced his intent to nominate Jaime Lizárraga to fill the seat to be vacated by SEC Commissioner Allison Herren Lee, and Mark Uyeda to fill the seat vacated by former Commissioner Elad Roisman. Lizárraga currently serves as senior advisor to Speaker of the House Nancy Pelosi. Uyeda is a career attorney with the SEC but is currently on detail from the SEC to the US Senate Committee on Banking, Housing, and Urban Affairs. For more information, refer to this PubCo Post. This news follows the departure of Roisman in January and the announcement by Herren Lee in March that she will step down from the SEC once her successor has been confirmed.
Director’s guide to ESG oversight
In March, PwC’s Governance Insights Center published its ESG Oversight: The Corporate Director’s Guide, which highlights practices that have emerged – and questions that boards should consider – when overseeing environmental, social and governance matters given a company’s industry, size, growth trajectory and strategy. The guide is broken down into three parts: understanding the ESG landscape; understanding the board’s role in overseeing ESG (including an overview of ESG standards and frameworks); and mapping ESG to oversight (including summaries on allocating and integrating responsibility among the board and its committees).
Proposed SPAC rules
On March 30, the SEC announced that it had approved proposed disclosure and other requirements regarding SPACs, shell companies and projections. The proposed rules would add a new Subpart 1600 to Regulation S-K, which would require, among other things, disclosures about the SPAC sponsor, conflicts of interest and dilution, as well as a statement from the SPAC as to whether it reasonably believes that the deSPAC transaction and any related financing are fair or unfair to unaffiliated security holders (including, if applicable, disclosure of any outside report, opinion or appraisal relating to the fairness of the transaction).
In addition, under the proposal, the private operating company that is the target of the SPAC would be deemed a co-registrant when the SPAC files the registration statement on Form S-4 or F-4 for the deSPAC transaction, which would subject the private company and its signatories to liability under Section 11 of the Securities Act of 1933.
The proposal also would:
- Require enhanced disclosure regarding projections presented in filings relating to deSPAC transactions and make the safe harbor in the Private Securities Litigation Reform Act of 1995 a safe harbor for the use of projections unavailable in filings by SPACs.
- Deem a SPAC IPO underwriter that “takes steps to facilitate” or “otherwise participates (directly or indirectly)” in a subsequent deSPAC transaction or any related financing transaction to be a statutory underwriter for purposes of the deSPAC transaction.
- Require that the registration statement filed in connection with the deSPAC transaction register not just the offering of shares to the target company’s shareholders but also register an offering to the existing SPAC shareholders.
- Include a safe harbor for SPACs that would deem a SPAC to not be an investment company under the Investment Company Act of 1940, if certain conditions are met.
- Include technical changes to disclosure requirements for SPAC IPOs and deSPAC transactions, and technical reporting requirements for post-deSPAC companies.
The comment period will remain open until at least May 31, 2022. For more information, refer to the SEC Fact Sheet and this PubCo blog post.
Webcast for compensation committees
On March 24, CompensationStandards.com hosted a webcast titled “The Top Compensation Consultants Speak,” with representatives from Semler Brossy, Pay Governance and Pearl Meyer. Topics included:
- Key current issues and considerations for compensation committees
- Human capital management
- Gender and ethnicity pay gaps and pay equity
- Integrating ESG into pay-for-performance initiatives
- The latest pay ratio practices
- Benchmarking pay during COVID-19
- Director compensation in a competitive environment
- Early proxy season feedback
A transcript is not yet available, but there’s an audio archive of the webcast.
This content is provided for general informational purposes only, and your access or use of the content does not create an attorney-client relationship between you or your organization and Cooley LLP, Cooley (UK) LLP, or any other affiliated practice or entity (collectively referred to as “Cooley”). By accessing this content, you agree that the information provided does not constitute legal or other professional advice. This content is not a substitute for obtaining legal advice from a qualified attorney licensed in your jurisdiction and you should not act or refrain from acting based on this content. This content may be changed without notice. It is not guaranteed to be complete, correct or up to date, and it may not reflect the most current legal developments. Prior results do not guarantee a similar outcome. Do not send any confidential information to Cooley, as we do not have any duty to keep any information you provide to us confidential. This content may be considered Attorney Advertising and is subject to our legal notices.