124 STAT. 1901 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(3) INDEPENDENCE.—The rules of the Commission under paragraph (1) shall require that, in determining the definition of the term ‘independence’ for purposes of paragraph (2), the national securities exchanges and the national securities associations shall consider relevant factors, including— ‘‘(A) the source of compensation of a member of the board of directors of an issuer, including any consulting, advisory, or other compensatory fee paid by the issuer to such member of the board of directors; and ‘‘(B) whether a member of the board of directors of an issuer is affiliated with the issuer, a subsidiary of the issuer, or an affiliate of a subsidiary of the issuer. ‘‘(4) EXEMPTION AUTHORITY.—The rules of the Commission under paragraph (1) shall permit a national securities exchange or a national securities association to exempt a particular rela- tionship from the requirements of paragraph (2), with respect to the members of a compensation committee, as the national securities exchange or national securities association deter- mines is appropriate, taking into consideration the size of an issuer and any other relevant factors. ‘‘(b) INDEPENDENCE OF COMPENSATION CONSULTANTS AND OTHER COMPENSATION COMMITTEE ADVISERS.— ‘‘(1) IN GENERAL.—The compensation committee of an issuer may only select a compensation consultant, legal counsel, or other adviser to the compensation committee after taking into consideration the factors identified by the Commission under paragraph (2). ‘‘(2) RULES.—The Commission shall identify factors that affect the independence of a compensation consultant, legal counsel, or other adviser to a compensation committee of an issuer. Such factors shall be competitively neutral among cat- egories of consultants, legal counsel, or other advisers and preserve the ability of compensation committees to retain the services of members of any such category, and shall include— ‘‘(A) the provision of other services to the issuer by the person that employs the compensation consultant, legal counsel, or other adviser; ‘‘(B) the amount of fees received from the issuer by the person that employs the compensation consultant, legal counsel, or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel, or other adviser; ‘‘(C) the policies and procedures of the person that employs the compensation consultant, legal counsel, or other adviser that are designed to prevent conflicts of interest; ‘‘(D) any business or personal relationship of the com- pensation consultant, legal counsel, or other adviser with a member of the compensation committee; and ‘‘(E) any stock of the issuer owned by the compensation consultant, legal counsel, or other adviser. ‘‘(c) COMPENSATION COMMITTEE AUTHORITY RELATING TO COM- PENSATION CONSULTANTS.— ‘‘(1) AUTHORITY TO RETAIN COMPENSATION CONSULTANT.—
