The Advisors' Blog

– Broc Romanek

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…

– Broc Romanek

Dig this updated “Compensation Committee Handbook” from Skadden Arps. Written in a style that is easily understood & 112 pages long…

– Broc Romanek

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…

– Broc Romanek

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…

– Broc Romanek

Yesterday, ISS posted this updated set of FAQs for equity compensation plans, complete with 2019 burn rate benchmarks. There are 8 new or modified FAQs…

– Broc Romanek

The SEC just posted this 104-page adopting release for the new hedging disclosure rules. We’re posting memos in our “Hedging” Practice Area. Ho, ho, ho…

– Broc Romanek

Last week, ISS released its “final” compensation FAQs – the “preliminary” set was issued last month. Here’s a blog from FW Cook’s Samantha Nussbaum about the final FAQs…

– Broc Romanek

Yesterday, the SEC adopted the hedging rules required under Section 955 of Dodd-Frank. The SEC adopted these rules a day before its open Commission meeting that included it on the agenda. Today’s meeting agenda is a full one, so the SEC adopted these rules – and requested comments on quarterly reporting & earnings releases – ahead of schedule to provide more time for the other rulemakings still on the agenda.

Here’s the SEC’s press release (the adopting release isn’t available yet) – and we’ll be posting memos in our “Hedging” Practice Area. Except for “smaller reporting companies” and “EGCs” – which get a one-year pass to mid-2020 – the new hedging rules apply to proxies filed during fiscal years beginning after July 1, 2019.

– Broc Romanek

Here’s the inaugural “Global Top 250 Compensation Survey” from FW Cook, FIT Remuneration Consultants & Pretium Partners, which contains information on compensation levels for CEOs & CFOs, the design of long-term incentives, and share usage at the 250 largest listed companies globally…

– Broc Romanek

Here’s news from this ‘Willis Towers Watson’ blog:

Companies preparing for Year 2 CEO pay ratio disclosures now have more questions to consider. Recently, Fortune 500 company compensation committees began receiving a letter from a group of 48 institutional investors requesting them to disclose more information on workforce compensation practices.

The letter posits 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.