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Legal Update

US SEC Approves Nasdaq Rule Amendments Requiring Disclosure of “Golden Leash” Arrangements

18 July 2016
Mayer Brown Legal Update
On July 1, 2016, the Securities and Exchange Commission (SEC) approved amendments to the listing rules of The Nasdaq Stock Market LLC (Nasdaq) that will require listed companies to disclose compensation paid by third parties to directors or nominees for directors, sometimes referred to as “golden leash” arrangements. Often used by shareholder activists in proxy contests to encourage persons to serve as their director nominees, these arrangements may include compensating directors based on achieving certain benchmarks important to the third party such as an increase in share price over a fixed term. Nasdaq believes the amendment will enhance transparency around third-party board compensation, helping address concerns about conflicts of interest among directors and a focus on short-term results. This legal update discusses the disclosure requirements, exceptions and practical considerations for Nasdaq-listed companies.


  • Philip J. Niehoff
    T +1 312 701 7843
  • Laura D. Richman
    T +1 312 701 7304
  • Robert F. Gray, Jr.
    T +1 713 238 2600
  • Michael L. Hermsen
    T +1 312 701 7960
  • Andrew J. Stanger
    T +1 713 238 2702

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