International Executive Compensation
New Developments
- 2019.07 Jones Day Int'l Report re Equity Compensation and Stock Plans
- 2017.01 Annual Reporting for Equity Awards - see this alert for country-specific information.
- 2016.06.27 UK Enhanced Say on Pay - Preliminary Results. See article titled ‘Form over substance’ in new UK company reporting rules? which begins with this foreshadowing: The first year of new UK disclosure rules did not curb CEO pay or enhance the link between CEO pay and firm performance at FTSE 100 companies, but led instead to “opportunistic reporting for the sake of reputation management,” says a new study from Cambridge Judge Business School and King’s College London.
- 2016.06.08 UK Noncompetes - What suffices for consideration? See this LinkedIn post for an interesting commentary that begins as follows: "Post-termination restrictions introduced after an employee has started work were generally thought to be enforceable only where the employee is given a tangible benefit (e.g. a pay rise) in return. The High Court's decision last week in Pickwell & Nicholls v Pro Cam CP Ltd, however, has cast this into doubt."
Articles:
2011.Mar Crossing the Pond in Search of Better Executive Compensation Practices (Poerio et al, Corp. Gov. Advisor)
2011.Feb The Executive Compensation Controversy: A Transatlantic Analysis (Cornell), starting with this intro:
- "Based on a comprehensive comparison of pay spanning six years and covering approximately 1,500 US firms and 900 firms from nine European countries, we show that US CEOs are paid only modestly more than their European counterparts after controlling for firm, ownership, and board characteristics."
- "Moreover, we find that pay is more tightly linked to performance in the United States than throughout most of Europe, and that American executives hold more wealth in company stock and options than do their European counterparts. Indeed, we conclude that most of the difference in cross-continental pay levels is attributable to the higher use of stock and options in the United States, which in turn is related to a variety of tax, accounting, and social policies that have encouraged option grants in the United States.”
- "While pay design can always be improved and there will always be isolated abuses, we urge governments to resist temptations to further regulate pay in both banking and nonbanking sectors. Part of the problem is that regulation – even when well intended – always creates unintended (and usually costly) side effects."
- "Moreover, regulation is often designed to be punitive rather than constructive, and is inherently driven by politicians more interested in their political agendas rather than creating shareholder value. Ultimately, we conclude that improvements in executive compensation will best emanate through stronger corporate governance, and not through direct government intervention."
2008 Global Handcuffs and Claw-Backs: Getting Tough With Cross-Border Loyalty Protections (Poerio et al.).
2003 U.S. Stock Plan Controls over Swiss Law re Forfeiture of Stock Options. The Ninth Circuit held in Oracle Corp. v. Falotti, 319 F.3d 1106, 29 EBC 2687 (9th Cir. 2003), cert. denied 124 S. Ct. 225, 31 EBC 2760 (2003 )that a compensation committee had properly concluded that a Swiss employee ceased to be employed for purposes of Oracle's stock option plan on the last day of performing services, even though a later termination date was required under Swiss law (which governed under the executive’s employment contract). The stock option plan included a California choice of law provision and granted discretion to the compensation committee to decide when an individual ceased to be employed. . If the executive had succeeded in establishing that his employment had terminated on the date provided under Swiss law, he would have vested in additional options.