Key takeaways
- New Reporting Requirements for Institutional Investment Managers: Institutional investment managers are now required to report on Form N-PX how they voted on three types of executive compensation votes: "say-on-pay," "say-on-frequency," and "golden parachutes." These amendments, adopted by the SEC on July 1, 2024, extend the reporting requirements beyond the securities listed on Form 13F.
- Filing Deadline and Format: Institutional investment managers must file their first reports on amended Form N-PX by August 31, 2024, covering the period from July 1, 2023, to June 30, 2024. The reports must be submitted electronically in XML format.
- Simplified Reporting and Third-Party Services: Simplified reporting is allowed under specific conditions, such as when all proxy votes are reported by other entities or when the manager did not exercise voting power. To comply with the new requirements, many institutional investment managers may need to use third-party services for proxy vote monitoring and reporting, or develop their own tracking and reporting policies.
Form N-PX has been used for over two decades by mutual funds to report their proxy voting with respect to securities of public companies that they hold. On July 1, 2024, the U.S. Securities and Exchange Commission (the SEC) adopted amendments to the Investment Company Act of 1940 and the Securities Exchange Act of 1934 that now require institutional investment managers to report on Form N-PX how they voted their proxies on three types of executive compensation votes submitted to public company stockholders:
- Approval of executive compensation ("say-on-pay")
- Executive compensation vote frequency ("say-on-frequency")
- Votes on compensation agreements for departing executives following an extraordinary transaction ("golden parachutes").
An "institutional investment manager" is any person, other than a natural person, investing in or buying and selling securities for its own account as well as any person exercising investment discretion with respect to the account of any other person. Institutional investment managers will be required to file their first reports on amended Form N-PX by August 31, 2024, with these reports covering the period of July 1, 2023 to June 30, 2024. The filing is required to be made electronically in XML format.