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Charlotte May

Advising clients on a broad range of corporate and securities matters, Charlotte May regularly handles capital markets transactions, mergers and acquisitions, and general corporate governance, securities disclosure, and compliance issues.

Charlotte represents a wide range of corporate clients with particular experience in the financial services and life sciences industries. She assists clients with respect to various transactional matters, including primary and secondary registered offerings, private placements, exchange offers, tender offers, mergers and acquisitions, FinTech partnerships and acquisitions and similar matters. She also advises various public companies in the preparation of SEC periodic reports, proxy statements, beneficial ownership reports, public company disclosure and on other securities law and stock exchange compliance matters. Charlotte also counsels public companies on a variety of corporate governance matters, including board and committee composition, FinTech governance and organization, environmental, social, and corporate governance (ESG) matters, internal and disclosure controls, insider trading and similar matters. Charlotte also serves as a co-chair of the firm’s Fintech Initiative.

Charlotte’s recent pro bono work includes advising World Central Kitchen in connection with various contracts required to provide meals in response to humanitarian, climate, and community crises, advising Humane Rescue Alliance in its acquisition of St. Hubert’s Animal Welfare Center and advising Kitty of Angels, Inc. and Medical Student Orthopedic Society, Inc. in its formation as a nonprofit and 501(c)(3) company. She is also a board member for Kitty of Angels, Inc. In addition to her work at Covington, Charlotte:

  • Acts as the Co-Chair of the American Bar Association’s Women in M&A Subcommittee, which focuses on the participation, promotion, and retention of women in the M&A field.
  • Frequently speaks and publishes on topics in M&A for the American Bar Association and is a producer for the ABA Business Law section’s webinars for M&A.
  • Served as Chair of the American Bar Association M&A Market Trends Subcommittee 2024 Public Target Deal Points Study and as Attorney Working Group Leader on the previous study. The study is widely recognized as the gold standard for market metrics of key negotiated deal points in public target M&A deals.
  • Served as a Study Leader for the American Bar Association’s M&A Market Trends Subcommittee Deal Points Study on Carveout Transactions. The study is one of its kind for market metrics of key negotiated deal points in carveout transactions.

Charlotte was a judicial extern for Hon. Judge Consuelo B. Marshall, U.S. District Court, Central District of California prior to joining the firm.

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On February 22, 2023, the New York Stock Exchange (“NYSE”) and the Nasdaq Stock Market (“Nasdaq”) filed rule proposals[1] to adopt new listing standards implementing Rule 10D-1 under the Securities Exchange Act of 1934. That rule, which the Securities and Exchange Commission (the “SEC”) adopted in October 2022, requires national securities exchanges to implement standards to require listed companies to adopt and publicly file so-called “clawback” policies to recover erroneously awarded incentive-based compensation following accounting restatements. Rule 10D-1, which was first proposed in 2015 and re-opened for comment twice, implements Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The proposed listing standards are subject to a 21-day comment period once published in the Federal Register before the SEC can approve them, and must, in any event, become effective by November 28, 2023. Listed companies will be required to adopt clawback policies that comply with the new standards within 60 days of the effective date of the applicable listing standards (the “Adoption Deadline”).

The listing standards proposed by both NYSE and Nasdaq are materially consistent with Rule 10D-1 and its adopting release. Among other things, both proposed listing standards provide for the commencement of delisting proceedings for listed companies that fail to either adopt a compliant clawback policy or comply with such policy after a clawback obligation arises. These delisting provisions are discussed below, and, for an in-depth discussion of Rule 10D-1’s requirements, please refer to our previous alert.

NYSE – Delisting for Noncompliance

Failure to Adopt a Policy: As proposed, a company listed on NYSE that fails to adopt a compliant clawback policy by the Adoption Deadline will have five days to notify NYSE, after which the exchange will send a written delinquency notification to the company. Upon receipt of this notification, the company would have five days to contact NYSE to discuss the delinquency and to issue a press release disclosing the company’s delinquency, the reason for the delinquency and, if known, the anticipated date on which a clawback policy will be adopted. If the company fails to issue such a press release in time, NYSE will issue a press release stating that the company has received a delinquency notice.Continue Reading NYSE and Nasdaq Propose Clawback Listing Standards

On October 26, 2022, the Securities and Exchange Commission (the “SEC”) adopted a long-awaited rule[1] that will require listed companies to adopt and publicly file so-called “clawback” policies to recover erroneously awarded incentive-based compensation following accounting restatements. Companies with securities listed on national securities exchanges, including NYSE and Nasdaq, will be required to implement such policies within 60 days of the effective date of new listing standards, which the exchanges must adopt within 12 months of the new rule’s publication in the Federal Register. Companies who fail to comply will be subject to delisting.

The most significant deviation from the SEC’s initial proposal of the clawback rule in 2015 is that Rule 10D-1 will require companies to conduct a clawback analysis not only for “Big R” accounting restatements, which must be disclosed under Item 4.02(a) of Form 8-K, but also for “little r” accounting restatements, which involve the correction of errors in prior period financial statements when those financial statements are included in a current period filing.

Clawback Policy Requirements

Under the new rule, a listed company’s clawback policy must require the company to recover, reasonably promptly, erroneously awarded incentive-based compensation from persons who served as an executive officer at any time during the performance period for such incentive-based compensation and who received such compensation during the three fiscal years preceding the date on which the company is required to prepare an accounting restatement. The compensation to be recovered is the amount in excess of what would have been paid based on the restated results.Continue Reading SEC Requires Clawback Policy