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…
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…
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.
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…
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.
We blogged several weeks ago about a scheduled open Commission meeting to consider a “request for comment” on the nature & content of quarterly reports & earnings releases. That meeting was cancelled due to President George H.W. Bush’s funeral. Yesterday, the SEC posted this Sunshine Act notice for the rescheduled meeting, to be held next Wednesday – December 19th. And at this meeting, the SEC will also consider adopting the long-pending hedging rules – as required by Section 955 of Dodd-Frank…
A few months ago, Liz blogged about new Section 83(i) of the Internal Revenue Code – it allows private company employees to defer taxes for up to five years from the exercise of a stock option or settlement of a RSU. Last week, the Treasury Department & IRS issued this notice about this new provision. This memo from Davis Polk outlines the key takeaways (we’re posting memos in our “Restricted Stock” Practice Area):
– The measurement period to determine whether the employer satisfied the eligibility requirement that 80% of U.S. employees received grants is measured on a single calendar year basis and does not take into account grants made in prior years
– Employers must withhold taxes at the maximum individual rate in effect at the time the stock with respect to which a Section 83(i) election has been made (deferral stock) is treated as received in income and will be treated as a noncash fringe benefit, which will provide employers additional time to collect amounts required to be withheld from employees
– The employee and employer must agree to place deferral stock in escrow to ensure that applicable withholding taxes are deducted
– An employer may opt out of Section 83(i) by not establishing an escrow arrangement