In response to President Trump’s Executive Order 13772 which requested proposals to promote economic growth and enable consumers, market participants, and financial companies to participate better in the economy, the Center submitted an extensive letter of recommendations to the Department of Treasury.  The Executive Order requires the Treasury Secretary to consult with the SEC and other regulatory agencies that are members of the “Financial Stability Oversight Council” which the Dodd-Frank Act created to “identify any laws … regulations, guidance, reporting and recordkeeping requirements . . . that promote the core principles set forth in the order, including “making regulation efficient, effective and appropriately tailored.” Although achieving regulatory reform on some issues may be difficult currently, putting the requests on the record and fostering their inclusion in any subsequent federal reports are fundamentally important for future reform efforts.  The Center’s recommendations include:

• Delay and Revise the Dodd-Frank Pay Ratio Mandate:  Noting the high compliance burdens as well as the questionable and likely misleading nature of the resulting pay ratio disclosure, the Center urged the immediately delay and revision of the pay ratio disclosure. 
• Revise the Dodd-Frank Financial Services Incentive Compensation Rule:  The Center points out the significant issues with the 2016 reproposal of the Dodd-Frank Incentive Compensation Rules and notes that the rules are not likely to receive near-term action.  However, the Center also states that if Treasury decides to implement the rule, it should consider making significant changes to the proposed rule, most notably with a return to a focus on the 2010 Incentive Compensation Safety and Soundness Standards.
• Implement Proxy Advisory Firm Regulatory Regime:  The Center’s letter points out the power of proxy advisory firms to dictate corporate governance and executive compensation policy virtually without regulatory oversight and urged the Treasury Department to consider the House Proxy Advisory Firm reform efforts as a model for a potential SEC regulatory regime.  
• Revisit and Revise the Executive Compensation Disclosure Requirements:  The letter details how the current disclosure requirements no longer fit the status quo of executive compensation policy, practice, and investor expectations and as a result are extensively long and cumbersome disclosures which leave much to be desired.  The Center recommended the entire disclosure regime be reexamined.