Notable Developments as of 2020.02.29
2020.03.24 M&A Readiness - for Executive Compensation and Benefit Plans. For insights into deal-killers and key precautions, tune to this webinar hosted by Institutional Investment Consulting. Just email Mark for a copy of the PowerPoint, as well as if you have questions. See generally M&A Benefit Plan Matters.
2020.02.29 Profits Interests Examined. This complex incentive has the potential to generate capital gains treatment, but needs careful consideration before implementation. Here are articles that examine the associated tax, business, and administrative considerations, as well as comparisons to stock options and other incentives.
2020.02.28 Take Warning: Tax Exempt Orgs. This is happening too often. A valued executive gets ready to retire from a charity or other tax exempt organization, and is promised some form of severance or retirement benefit that will be paid for months or years afterward. Because the payout involves a fixed payout schedule, no one expects a tax disaster. For why they could be wrong, go to 457(f) Disasters.
2020.02.27 Forfeitures for Competition: What Would Maryland Do? The 4th Circuit has examined Maryland law in detail with respect to the circumstances under which post-employment plan benefits may be forfeited and clawed-back when executives breach their non-competition and non-solicitation covenants. For discussion of the court's split-decision, go to Forfeitures-for-Competition.
2020.01.27 Survey Data - From Severance to Other Forms of Executive Comp. Not surprisingly, between 2x and 3x pay is the range for CEO severance in just over 80% of the top 200 public companies. Likewise, those multiples apply in 84% of the surveyed companies to ... continued at Severance Surveys. See generally Topical Index for Executive Comp. Survey Data.
2020.01.14 Executive Compensation Strategies for Volatile Economic Times. See this Law360 article for 8 planning alternatives that public and private companies should consider.
2019.12.14 Bonuses and Vesting - Good Faith and Fair Dealing. Principles of fairness generally entitle executives and other employees to collect bonuses and other performance-based compensation if applicable goals have been satisfied, as well as if . . . continued at Cash Bonus Litigation.
2019.11.22 Executive Employment Agreement Insights: From High Stakes to Competing Interests. This comprehensive article (featured in Law360) practically serves as a terms sheet in that it examines the material terms of executive-level employment agreements - with insights that contrast the perspectives of employers and executives. Part 1 covers compensation, benefits and noncompetes / Part 2covers severance scenarios, changes in control, taxes (409A and golden parachute) and dispute resolution.
2019.09.09 Executive Retention and Change in Control Planning. Before merger or sale negotiations begin, potential sellers (or targets!) should get their severance house in order. From survey data about change-in-control benefits, to springing rabbi trusts, to ERISA-fied plans, to post-closing administrative protections, see this M&A Precaution Checklist.
2019.04.18 Rabbi Trusts: When to Ask? What to Get? A recent Law360 headline brings rabbi trusts immediately to mind. It reads "Ex-Manufacturing Co. CEO Says He's Owed $4.4M in Benefits" (4/10/2019). See this webpage for a discussion of how a rabbi trust could have helped, and when the protections of a rabbi trust make sense for an executive to pursue.
Notable Updates in 2019:
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