TARP Doesn't Catch Sloppy Drafting

The Division of Corporation Finance has released guidance on Section 7001 of the American Recovery and Reinvestment Act of 2009, which amended Section 111(e) of the Emergency Economic Stabilization Act to "permit a separate shareholder vote to approve the compensation of executives." This is what those wags in securities land call "say on pay." Makes me think of Lyndon Johnson: "Hey hey, say on pay, how many kids did you kill today?"

The only teensy oversight in this provision is that it lacks an effective date. Chris Dodd sent a letter to the SEC expressing his opinion that this provision "became effective on February 17, 2009 and applies to preliminary or definitive proxy statements."