The Advisors' Blog

Here’s the latest 151-page guide for compensation committees from Wachtell. This year’s guide addresses a number of developments, including the newly-required disclosure regarding the timing of option grants, the expanded definition of “covered employees” under Section 162(m) that will become effective for tax years beginning after December 31, 2026 and the increased focus on disclosure of performance-vesting equity and clawback policies that go beyond Dodd-Frank requirements in the proxy advisors’ most recent voting guidelines. The guide’s excellent summary of the proxy advisors’ voting guidelines concerning executive compensation practices is definitely worth a look. 

As usual, the guide includes a sample “Compensation [and Management Development] Committee Charter” as an exhibit, although it notes, “It would be a mistake for any company to simply copy published models. The creation of charters requires experience and careful thought . . . we recommend that each company tailor its compensation committee charter and written procedures to those that are necessary and practical for the particular company.”

– Meredith Ervine