In January 2013, the SEC approved changes to Nasdaq’s listing rules regarding compensation committees. These changes apply to any company whose stock is listed on Nasdaq – with certain significant exceptions. Smaller reporting companies, or SRCs, are exempt from many, but not all, of the new requirements.
The deadline for compliance with the new listing rules affecting SRCs is approaching. SRCs have until the earlier of (i) their first annual meeting after January 15, 2014, or (ii) October 31, 2014, to comply with the new requirements. Listed companies will be required to certify to Nasdaq, within 30 days after the applicable deadline, that they have complied with the new listing rules on compensation committees. A draft certificate was included in Nasdaq’s notice of proposed rule change.