Heads up for TARP companies scrambling to comply with the executive compensation provisions of the American Recovery and Reinvestment Act: The Securities and Exchange Commission staff has issued three new Compliance and Disclosure Interpretations related to the Act’s say-on-pay requirement.

The Feb. 24 C&DIs comprise the staff’s interpretations of Section 7001 of ARRA, which amended the Emergency Economic Stabilization Act to require any TARP recipient to “permit a separate shareholder vote to approve the compensation of executives, as disclosed pursuant to the compensation disclosure rules of the Commission,” during the period in which any obligation arising from financial assistance provided under the TARP remains outstanding.

As Compliance Week previously reported, Senate Banking Committee Chairman Chris Dodd, in a Feb. 20 letter to SEC Chairman Mary Schapiro, stated his view that the provision applies to preliminary or definitive proxy statements (other than definitive proxy statements which relate to preliminary proxy statements filed on or before Feb. 17, 2009) filed with the SEC after Feb. 17, 2009.

Importantly, the C&DIs note that a company that determines to comply with the say-on-pay provision will be required to file a preliminary proxy statement pursuant to Exchange Act Rule 14a-6(a). Companies facing special circumstances that would like to request acceleration of the rule’s 10-day review period should contact the Assistant Director of the office that reviews the company’s filings to discuss the special circumstances the company faces and how the 10-day review period could be accelerated.

The C&DIs also clarify that a separate shareholder vote on executive compensation isn’t required for any meeting other than the annual meeting of shareholders for which proxies will be solicited for the election of directors or a special meeting in lieu of such annual meeting.

Finally, they make clear the staff’s view that since smaller reporting companies aren’t required to provide compensation discussion and analysis under Item 402 of Regulation S-K, a smaller reporting company subject to the Act’s say-on-pay provision doesn’t have to provide CD&A disclosure.