NYSE and Nasdaq Modify Bright-Line Director Independence Tests
 
August 25, 2008
 

The NYSE and Nasdaq have modified their corporate governance listing standards so that directors can receive compensation from the company of up to $120,000 per year (rather than $100,000) and still remain independent. This increase is consistent with the SEC’s 2006 increase of the disclosure threshold for related-party transactions under Item 404(a) of Regulation S-K. In addition, the NYSE has modified its director independence test relating to auditor affiliation to permit a director to have an immediate family member who is an employee, but not a partner, of the company’s auditor, as long as the family member employee does not personally work on the company’s audit. This change brings the NYSE standard more in line with the auditor tests used by Nasdaq and the AMEX.

The NYSE changes become effective September 11, 2008, and the Nasdaq change became effective August 8, 2008.

http://apps.nyse.com/commdata/pub19b4.nsf/docs/07DD57A6CC5EB6B9852574A40044CEEF/$FILE/NYSE-2008-75.pdf

http://www.sec.gov/rules/sro/nasdaq/2008/34-58335.pdf