Farient Advisors offers these “7 Deadly Sins” for comp committees to avoid in 2019 (in other words, make sure these items are on your meeting agendas):
1. Not re-evaluating your clawback policies
2. Not having a pay structure that will adapt to disruptive business changes
3. Thinking about director pay disclosure the same way
4. Doing a perfunctory review of the compensation committee charter
5. Ignoring the war for talent
6. Disregarding the elephant in the room – the potential for a downturn
7. Failing to understand economic value added (EVA)
In this blog, Stinson Leonard Street’s Steve Quinlivan lists a couple of recent Section 162(m) disclosures pulled from recent proxy statements. This new disclosures reflect how the Section 162(m) deduction limit for performance-based compensation was repealed by the “Tax Cut and Jobs Act,” effective for taxable years beginning after December 31, 2017, subject to transition relief…
This memo by McCarter & English’s Joe Bachelder explains the reasons why CEO pay has grown over the years. Compare that to my own “An Open Letter to All Journalists,” which also lists a bunch of factors…
In our “Say-on-Pay” Practice Area, we have a bunch of memos about how to handle a negative recommendation from proxy advisors – including this new memo from Davis Polk and Semler Brossy
Tune in tomorrow for the webcast – “The Latest: Your Upcoming Proxy Disclosures” – to hear Mark Borges of Compensia, Alan Dye of Hogan Lovells and Section16.net, Dave Lynn of TheCorporateCounsel.net and Morrison & Foerster and Ron Mueller of Gibson Dunn discuss all the latest guidance about your upcoming pay ratio & say-on-pay disclosures – including the new hedging rules and the latest SEC positions, as well as how to handle the most difficult ongoing issues that many of us face.
This blog by ExeQuity’s Ed Hauder is interesting because it gives a “deep dive” into one company’s decisions about how to better construct an LTIP. Also see this comprehensive memo by FW Cook about the LTIP practices for the top 250 companies…
As noted in this press release, the UK kicked off mandatory pay ratio and LTIP disclosure obligations for companies yesterday. This Deloitte memo – and Baker McKenzie memo – provide the details. The pay ratio disclosures will be different than those for US-companies. The new requirements apply to companies reporting on financial years starting yesterday or later – so the first actual reporting will be in next year’s disclosures…
Recently, I blogged about how Fortune 500 compensation committees have received letters from a group of 48 institutional investors requesting them to disclose more information on workforce compensation practices relative to CEO pay. These letters note that since “disclosure of the median employee’s pay provides a reference point for understanding the company’s workforce,” companies should move “to help investors put this pay information into the context of your company’s overall approach to human capital management” with more expansive disclosure.
Now, the NY Comptroller – which was a signatory to those letters – has announced agreements with five companies to withdraw a shareholder proposal on a related topic. That shareholder proposal urges companies to adopt policies that take into account the compensation of their workforce when setting CEO pay – and the companies’ agreements range from adding “human capital” disclosure, to enhancing workforce benefits, to committing to consider the CEO pay ratio when determining executive pay. For those reading this blog for a while, you know that we have been advocating the use of internal pay ratios as an alternative tool for compensation committees to consider since peer group benchmarking is tainted due to the slippery slope of most companies deciding to pay CEOs in the top quartile for decades…