Study: S&P 500 Use of ESG Metrics

We’ve blogged before about incorporating ESG metrics into incentive programs. Even though doing so can seem daunting, a recent report from Willis Towers Watson says ...

Read More

J.C. Penney’s CD&A Highlights

The J.C. Penney Company. Inc. filed its latest definitive proxy statement yesterday. As a long-time customer (particularly in my youth), I was curious to see what ...

Read More

Reporting Requirements for Waived or Foregone Compensation

You may have been reading about (and some may have facilitated) senior executives announcing that they will forego all or a portion of their salary, bonus or other ...

Read More

More on “Addressing COVID-19 for Exec Comp Plans”

A couple of weeks ago, I wrote about implications and approaches to dealing with the effect of the COVID-19 pandemic on executive compensation plans. As companies and ...

Read More

Executive Compensation and Other Restrictions under the CARES Act – TARP Redux?

According to news reports, Congress just approved a final version of the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748) (‘‘CARES Act”) and sent it ...

Read More

Consider Everything During Crisis

The coronavirus crisis and market volatility has left many wondering what they can do about compensation decisions made before the crisis ensued, and if they haven’t ...

Read More

Love And Section 409A In The Time Of COVID-19

Everyone is talking and writing about the high-level issues of performance goal setting, equity award timing, option repricing and share pool problems, so I thought I ...

Read More

Code Section 139 – Tax Free Aid To Employees

I hope readers are well. I have been minimizing blog posts lately, but I now plan on a few brief ones, not limited to executive compensation. Since COVID-19 was ...

Read More

Honeywell’s Compensation Risk Disclosure

As I skim through various proxy statements each week, I rarely spend much time reading the compensation-related risk disclosures that are included in or follow the ...

Read More

Addressing COVID-19 For Exec Comp Plans

COVID-19 is creating plenty of challenges for executive compensation programs. There are two recent memos, one from Semler Brossy and another from PwC, that discuss some ...

Read More

Poll Results: COVID-19 & Exec Comp Plans

A new poll from Pearl Meyer shows that although most companies haven’t considered how the COVID-19 pandemic will impact executive compensation in 2020, many have ...

Read More

EVA Metrics and Short-Termism

We’ve discussed before about ISS’ new EVA metrics that are being used in this year’s pay-for-performance analysis. Hopefully comp committees are looking at EVA ...

Read More

Clawback Policies: Suggestions for Strengthening

Liz wrote earlier this year about how clawback policies may be turning restatements into a rare species. Recently I came across a memo from SF Magazine discussing why, ...

Read More

Plan Participants Suing Over 409A Failures

The greatest risk from violations of the byzantine rules under Section 409A may not be from the IRS, but from the company’s own executives. I have written before on ...

Read More

Unusual Executive Compensation Approach

With a depressed company stock price, senior officers at AMC Entertainment Holdings recently agreed to a new compensation approach for its executives. The approach ...

Read More

HSR Thresholds Adjusted for 2020

Executive compensation professionals do not come across the Hart-Scott-Rodino Act often. However, it does come up in certain circumstances, as evidenced by the ...

Read More

What to Write About 162(m) Deductibility in the 2020 Proxy

Inquiring minds want to know what to write about 162(m) deductibility in this year’s proxy statement. Just a short blog today to address this question. For ...

Read More

Saving the Best for Last: CD&A Focus

Saving the best for last may sound good, but it can amplify stress levels when it involves proxy season. So, if you’re drafting the CD&A as the proxy statement ...

Read More

Performance-Based Comp Considerations

A recent blog from Foley & Lardner lists 10 considerations for management and compensation committees when establishing performance awards. The blog includes ...

Read More

Pre-IPO Peer Group Selection

Lots of considerations go into selecting a compensation peer group and proxy advisors tend to select peers based on industry, companies of similar size in terms of ...

Read More

Relaxation of the Definition of “Control” Creates New Opportunities and Risks for Banking Organizations

On January 30, 2020, the Board of Governors of the Federal Reserve System adopted a final rule to revise the Board’s regulations related to determinations of whether a ...

Read More

Hewlett-Packard Enterprise’s Director Compensation Disclosure

It’s been a slow week for proxy filings, which has enabled me to catch my breath before the 2020 proxy season really begins in earnest. And, while the filings ...

Read More

New CECL Rules Suggest Review of Banking Organizations’ Incentive Compensation Plans

The new Current Expected Credit Losses (CECL) accounting standard was issued by the Financial Accounting Standards Board (FASB) as ASC 326 in June 2016.  Application of ...

Read More

Comp Committees and ESG To-Dos

Liz wrote last fall about how one company was planning to tie executive compensation to elements of strategic ESG goals.  Shareholders continue to ask for standardized ...

Read More

SEC Release on Key Performance Metrics Has Implications for Compensation Professionals Too

Last month, the SEC issued an interpretive release addressing Item 303 of Reg S-K (see Rel. No. 33-10751, Key Performance Metrics (2020)).  Although this guidance ...

Read More

Reg G: Not Coming to a CD&A Near You?

As reported in this Reuters article, recent statements by Corp Fin Director Hinman say the SEC won’t be writing new rules to require public companies to explain why ...

Read More

Update on the Ongoing Saga of the SEC Rules on Proxy Advisory Firms

Because I already have written three times on this ongoing saga, I wanted to provide an update.  Recall that in August 2019, the SEC voted 3-2 to publish interpretive ...

Read More

How to Make CEOs Happy

Other than paying them well, what do CEOs want from us? It all comes down to knowing your audience – and with a CEO, that means tying all conversations back to ...

Read More

Telling a Story About Director Pay

Not too long ago, Liz wrote about how director pay continues to attract more and more attention.  As director pay faces increased scrutiny from investors, a recent blog ...

Read More

Engagement Disclosure Following Low Say-on-Pay Result

A recent Georgeson blog sheds light on disclosure of investor engagement practices after a company failed or received a “red zone” say-on-pay vote result. ...

Read More

TSR vs. CEO Pay: Which Grows Faster?

There’s a lot of attention lately to the fact that CEO pay growth is outpacing the growth of “average” worker pay. Maybe if companies are moving away from ...

Read More

Sonos’ Executive Compensation Highlights

As we begin to prepare for the upcoming proxy season, I find myself reflecting the evolution of the Executive Summary to the Compensation Discussion and Analysis and ...

Read More

SEC Proposal to Update Accredited Investor Definition Has 162(m) Implications Too

In December 2019, the SEC voted to propose amendments to the definition of accredited investor, one of the principal tests for who is eligible to participate in our ...

Read More

Clawbacks: Shareholders’ Continued Push for “Reputational” Triggers

Shareholders continue to scrutinize how clawback policies apply to situations of “reputational harm” – the latest examples coming in the form of shareholder ...

Read More

Discretion and Performance-Based Pay under the New 162(m) Proposed Regulations

Today, we will discuss the vexing issue of annual or long-term incentive plans that were made before November 2, 2017, and that satisfied the performance-based ...

Read More

Navistar’s Disclosure Graphics

Navistar International Corporation recently filed its definitive proxy statement for fiscal 2019, which includes a number of interesting tables and graphics in the ...

Read More

High Pay Ratio Impacts Say-on-Pay…But “Spin” Won’t Help

A recent paper from three B-School Profs might confirm what many people in our community have been advising: don’t over-explain your pay ratio. The research also ...

Read More

Fair Treatment for CFOs under the New 162(m) Proposed Regulations

Last month, I blogged on the new Proposed Regulations issued by IRS and the Treasury Department on the changes to Code Section 162(m) made by the Tax Cuts and Jobs Act ...

Read More

Proxy Season: Compensation Considerations

Here’s some pay-related proxy season recommendations from Hunton Andrews Kurth’s Tony Eppert: Adopt an annual grant policy – this can act as an affirmative ...

Read More

Failed Say-on-Pay? Simply Paying Less Isn’t the Answer

An Equilar blog summarizes the most common changes that companies make to their pay programs following a failed say-on-pay vote – the key is to emphasize pay for ...

Read More

Great Western’s Director Compensation Disclosure

As we begin a new year, it’s always a little tricky to predict what the next 12 months will bring. As I’ve thought about what to expect in 2020 in the area of ...

Read More

162(m): Proposal Would Limit Post-IPO & Transaction Deductibility

As Lynn discussed a few weeks ago, the IRS recently proposed regulations to implement changes to IRC Section 162(m) that are necessary under the 2017 Tax Cuts & Jobs ...

Read More

Glass Lewis: Your Peer Group is Changing

On January 1st, CGLytics officially will become Glass Lewis’s exclusive global partner for its “pay-for-performance” modeling and grading system. As part of that, ...

Read More

Small-Caps Jumping on “Pay-for-Performance” Bandwagon

Even as some investors might be cooling on “pay-for-performance,” there’s been an uptick in performance awards at smaller companies. A recent blog from Willis ...

Read More

Expanding the Application of 162(m) Deduction Cap to Other “Publicly Held Corporations”

On December 17, I blogged on the new Proposed Regulations on the changes to Code Section 162(m) made by the Tax Cuts and Jobs Act of 2017.  Today, I will focus on just ...

Read More

Proposed Regulations Clarifying Section 162(m)

Yesterday afternoon, IRS released Proposed Regulations on the changes to Code Section 162(m) made by the Tax Cuts and Jobs Act of 2017 (to be published in the Federal ...

Read More

Personal Jet Use: “Hidden” Corporate Costs

We discuss quite a bit around here about private jets – it’s a “perks” quandary that keeps on giving. Here’s more proof of how tricky it can be: a recent ...

Read More

CII’s Policy Overhaul: The Conversation Continues

A few months ago, Liz wrote about CII’s overhaul of its executive compensation policy – urging companies to reduce complexity of their incentive plans. Predictably, ...

Read More

Buybacks & Equity Compensation: Match Made in Heaven?

Our friend Bruce Dravis recently sent us a note about his research on the complementary relationship between stock buybacks & equity compensation – and a related ...

Read More

Gender & Racial Pay Gap: Intel Releases Detailed EEOC Data!

Yesterday, in addition to posting its annual “Diversity Report,” Intel made waves by also publishing on its website the pay data that it recently filed with the ...

Read More

Starbucks Joins Citi to Disclose Gender & Racial Pay Gap

Last year, I wrote about Citigroup being the first US company to disclose its “unadjusted pay gap” – which compares the median earnings of women & minorities ...

Read More

ISS Preliminary FAQs as to 2020 Compensation Policies

ISS has published its Preliminary Frequently Asked Questions as to Compensation Policies for 2020, as it does every year.  Generally, ISS publishes its “final” ...

Read More

Cisco’s Perquisites Disclosure

Before we head into the long Thanksgiving holiday, I thought I’d follow up the post that I published last month about the perquisites offered to the directors (and ...

Read More

Independent Security Studies Provide Tax Benefits and Protect Valued Executives

The Tax Cuts and Jobs Act of 2017 eliminated employers’ ability to deduct many fringe benefits and other business expenses, such as entertainment expenses, and reduced ...

Read More

Incentive Plans: How They’re Looking

Here’s the highlights from FW Cook’s annual report on incentive plans: – Profitability and revenue measures are the most commonly used financial measures among ...

Read More

Books & Records: Getting “Say-on-Pay” Info Isn’t Proper Purpose

Shareholders are increasingly sending a Section 220 “books & records” demand as a first step in derivative complaints – and companies need to tread carefully ...

Read More

Director Pay: Delaware Chancery Deals Procedural Blow to Plaintiffs

Director pay has been getting more scrutiny lately – but a Skadden memo covers one procedural bright spot for companies. Here’s the intro: On October 30, 2019, ...

Read More

But Wait! There’s More! SEC Proposes to Tighten Shareholder Proposal Thresholds

Because one highly controversial proposal wasn’t enough, the SEC also announced a rule proposal yesterday that would make it more difficult for shareholders to submit ...

Read More

More on “CalPERS’ Say-on-Pay Policy: No More Second Chances?”

Last spring, I wrote that CalPERS was considering a change to its proxy voting guidelines that would result in it voting “against” compensation committee members in ...

Read More

SEC’s “Proxy Advisor & Shareholder Proposal” Proposals Coming Next Week?

Although we haven’t yet seen a Sunshine Act notice from the SEC, the Financial Times is reporting that the SEC could propose new rules for proxy advisors & ...

Read More

Evolving “Compensation Committees”: What’s in a Name?

A memo from Willis Towers Watson says that compensation committee names & charters are starting to reflect issues that investors say they care about. Here’s some ...

Read More

Say-on-Pay: ISS Endorsement No Longer a “Golden Ticket”

Today’s blog falls in the “be careful what you wish for” category. A recent FTI memo says the diminishing influence of proxy advisors may be contributing to lower ...

Read More

“Realizable Pay” Could Be Making a Comeback – But The Devil’s In The Details

Disclosure of “realizable pay” seems to be less prevalent these days than it was when say-on-pay first hit the scene. But as I wrote a few months ago, ISS is ...

Read More

5 Steps for Tying Executive Pay to Sustainability

Last week, Clorox announced that it will tie executive pay to elements of strategic ESG goals – it’s the most recent of a few big-name companies to do so. Whether ...

Read More

“Pay” Shareholder Proposals Gain Traction

Here’s the key takeaways from the ISS proxy season review: – Increase in say-on-pay opposition: The number of say-on-pay votes receiving less than 70 percent ...

Read More

SEC Settles Nissan Fraud Charges: Don’t Have the CEO Set Their Own Pay!

We have written a couple of times over the past year about the SEC’s Nissan investigation, which (among other reasons) is of interest because Nissan is a Japanese ...

Read More

Executive Pay: CII Policy Overhaul Says to “Get Back to Basics”

From time to time, people question whether “pay-for-performance” is all it’s cracked up to be – and now you can add CII to its list of skeptics. The Council of ...

Read More

M&A Conflicts: Court Says Undisclosed CEO Comp Discussions Potentially Material

John Jenkins recently blogged about the Chancery Court’s decision in In re Towers Watson & Co. Stockholder Litigation, (Del. Ch.; 7/19), in which Vice Chancellor ...

Read More

How to Prepare for a “Gender Pay Gap” Proposal

I’ve blogged that activist shareholders have no intention of dialing back their “gender pay gap” efforts, and that shareholder support might be increasing. In ...

Read More

Executive Pay: Still A “Lightening Rod” For Shareholders

Lazard recently hosted a director forum – which also featured SEC Commissioner Rob Jackson and representatives from Whitegate Partners, Wellington and CalSTRS – to ...

Read More

Big Banks (Still) Answering to Congress for Big Pay Ratios

The House Committee on Financial Services is continuing to use pay ratio disclosure to hone in on human capital management issues at big banks. Yesterday, Committee ...

Read More

Glass Lewis Going “All In” With CGLytics…And Considering Pay-for-Performance Changes

As I wrote in June, Glass Lewis is now using CGLytics (instead of Equilar) for compensation & data analysis of North American companies. According to a Georgeson ...

Read More

How Did Say-on-Pay Fare This Year?

We’ve added an excellent analysis from Sullivan & Cromwell to our batch of reports indicating how pay fared on the ballots this proxy season at annual meetings. ...

Read More

Private Company Director Pay: Meeting Fees Still Common

A recent survey of 600 private companies showed that 72% pay an annual retainer to directors – and 54% pay a per-meeting fee. That’s according to an article from ...

Read More

Enhanced Scrutiny of Director Pay: Most Companies Aren’t Worried

Director pay is coming under more scrutiny due to ISS policy changes and recent Delaware cases. But according to a Pearl Meyer survey, most companies are ...

Read More

Avoiding an IPO Trainwreck: Comp Issues

There are unique challenges to working with companies preparing for an IPO – especially if management and/or the board don’t have much public company experience. In ...

Read More

CEO Stock Ownership: “Skin in the Game” vs. Voting Control

Even as CEOs are paid millions of dollars in stock awards each year, the majority of Russell 3000 CEOs control less than 1 percent of the companies they work for, and ...

Read More

Executive Pay As a Way to Advance Diversity Efforts

Here’s an excerpt from an interesting piece from Semler Brossy’s Todd Sirras about how the design of pay can influence the diversity of a company’s ...

Read More

Pay Ratio: A Missed Opportunity to Explain Material Changes Between Years

Here’s an excerpt from a piece by Deloitte Consulting’s Mike Kesner: One might have expected to see an explanation of material changes in a company’s CEO pay ...

Read More

Are Your Noncompete Agreements Dying of Old Age?

Here’s an excerpt from an Akin Gump piece: Legal developments and changes in an employee’s job or the nature of the company’s competition can cause ...

Read More

Human Capital Management: Defining the Compensation Committee’s Role

Recently, Mike Melbinger gave some reasons why compensation committees should expressly take on the responsibility of human capital management. A memo from Willis ...

Read More

162(m) Is Gone, But What About Similar State Laws?

Yes, way back in 2017 the Tax Act eliminated Internal Revenue Code Section 162(m) – the “qualified performance-based compensation” exception for deductible ...

Read More

Incentive Plans: Handling the Impact of Acquisitions

A Willis Towers Watson memo gives suggestions for handling annual, long-term and deal-related incentives at an acquiring company. Here’s an excerpt: One of the ...

Read More

Proxy Advisors: An Updated Set of “Best Practices”

Last week, a group of proxy advisors released an updated set of “best practices for proxy advisors.” These “best practices” were first issued in 2014. Here’s ...

Read More

Performance Awards: Are We Reaching the Apex?

According to a recent Equilar report, CEO pay continues to grow – with median total compensation increasing by 8% since 2017. It also identifies this notable ...

Read More

CEOs Got Pay Hikes Twice That of Workforce

An article from CBS News notes the discrepancy between the overall CEO rate of pay inflation and the pay rate of ‘typical’ worker. I imagine this type of media ...

Read More

Using ‘Weighted Average Cost of Capital’ to Test Performance Targets

Here’s a suggestion from this Pay Governance memo by John Ellerman: The weighted average cost of capital (WACC) is an important financial precept that is widely ...

Read More

Say-on-Pay: Shareholder Policies Getting More Complex?

I’ve blogged that most companies will experience a say-on-pay failure at some point. This PJT Camberview memo says that might be because voting policies have become ...

Read More

Buybacks: A Scapegoat for “Short-Termism”?

The Pay Governance memo analyzes the relationship among stock buybacks, long-term growth and executive compensation for companies in the S&P 500. Here’s the ...

Read More

What’s the “Latest Practicable Date” for S-4 Comp Tables?

Some of us have been internally debating what the “latest practicable date” means for purposes of S-4 compensation disclosures. There often are public-public deals ...

Read More

Why Equity Mix Matters

The CEO pay mix has been shifting to include more full-value stock awards and fewer stock options. A CFO.com article – which is based on this 2017 research – says ...

Read More

Private Company Equity Awards: Recent IPOs Reveal Trends

A blog from myStockOptions.com looks at innovations in private company awards that help ease tax obligations, which – notwithstanding new(ish) Internal Revenue Code ...

Read More

Paying for “The Right” Performance

A recent survey of 250 directors – conducted by Corporate Board Member & Compensation Advisory Partners – offered these key findings about performance ...

Read More

How ISS Looks at “Realizable Pay”

The ISS FAQs for its compensation policies say (Question 27) that research reports show realizable pay as compared to granted pay – and that realizable pay may be ...

Read More

Clawbacks: Hertz Sues Former Execs For $70 Million Based on “Tone at the Top”

If your company has to restate three years of financials due to some bad accounting decisions, who pays for the fallout? In a still-rare move, Hertz recently filed ...

Read More

Say-on-Pay: Triggers for State Street “Abstentions”

Last week, State Street Global Advisors posted “key takeaways” to remind everyone about the circumstances that could trigger it to abstain from a say-on-pay ...

Read More

Gender Pay Data: EEOC Reporting Now Required

Earlier this year, I blogged about the relationship between “gender pay” shareholder proposals and a handicapped rule that would have required companies with more ...

Read More

More on “Regulation G: Coming to a CD&A Near You?”

Last week, I blogged that SEC Commissioner Rob Jackson wants the SEC to require explanations & reconciliations when non-GAAP numbers are used in the CD&A. ...

Read More

Wachtell Lipton’s “Compensation Committee Guide”

The latest guide for compensation committees from Wachtell Lipton is here (which includes sample compensation committee charters for NYSE & Nasdaq companies in the ...

Read More

Regulation G: Coming to a CD&A Near You?

SEC Commissioner Robert Jackson recently co-authored a WSJ opinion piece calling for increased transparency about the use of non-GAAP numbers in setting executive pay. ...

Read More

Gain full access to any of our publications with a free trial

After sign up, we’ll get in touch to help you find the resources that will benefit you the most.