ExecutiveLoyalty.org

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   Executive Compensation   Loyalty  Business Issues

   Forms of Pay / Equity Awards

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   Survey Data

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   Restrictive Covenants  (state-by-state guide)

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   M&A Transactions

   Pension Liabilities

​   ROBS


Notable Developments as of 2018.06.21


2018.06.18  Deal-Breaking M&A Issues from Benefit Plans and Executive Compensation.  Merger and acquisition transactions will seldom break-apart due to issues related to employee benefit plans and executive compensation.  But seriously disruptive issues may arise, and are most likely to explode, when overlooked until the last minute. For a list of material issues to consider, continue reading here


2018.06.05  Moving the Bonus Plan Goalposts - Be Smart or Be Sued.  Whenever a company announces performance goals that apply to cash bonus, equity award, or vesting conditions, there is some risk that affected employees will later question the end-of-period determinations. Well-drafted plans and programs include significant employer protections. But some defects can haunt, such as the failure to address the impact of a future merger or acquisition, or the omission of a maximum limit.  Panera Bread tried to recover from the latter, but lost in the 8th Circuit because . . . continued at Litigation - Bonuses.   


2018.06.03  Targeted Stock Ownership Levels for CEOs. At first blush, six times salary seems like a lofty level that 75% of public companies have targeted for CEO ownership of company stock.  Interestingly, if you consider that base salary tends to comprise less than half the income of most CEOs, then today's 6x remains right in line with the long-term conventional wisdom that three times total compensation is a baseline for targeted stock ownership for executives.  Nevertheless, the better focus for compensation strategists would seem to be . . .  continued with links to 2018 survey data at  Stock Ownership Guidelines


2018.05.17  New or Amended Stock Plans - SEC Provides Disclosure Interps. For proxy statements that include proposals for new or amended stock award plans, the SEC has just issued guidance that answers common questions, such as . . .  continued at  shareholder approval.  


2018.05.14  ISS Problematic Pay Practices - Updated. On at least an annual basis, those who make executive compensation decisions for public companies should check their practices against the guidelines published by ISS and other proxy advisory firms.  See this table for a checklist that generally tracks, the U.S. Compensation Policy FAQs that ISS most recently updated on December 14, 2017. 


2018.05.13  Medical Powers of Attorney and Estate Planning.  This Investors Business Daily article is worth reading for smart reasons to get out in front of estate planning - especially for signing a medical power of attorney. Maryland provides a straightforward form, and it is thought-provoking to consider the choices. Glad to share more info via email.


2018.05.08  Checklist for Improving Release Agreements.  There is nothing worse for an employer than paying money to settle claims, and then finding that its claims release is invalid - or is resulting in further litigation.  See this page for provisions by which employers may avoid having their claims releases backfire.


2018.04.30  ERISA and Severance Plans: 3rd Circuit Decision Should Prompt Employers to be Proactive.  Pursuant to the Supreme Court's seminal Fort Halifax decision, an "ongoing administrative scheme" is needed in order for a severance plan to become subject to ERISA. Plan designs that build-in elements of discretion generally create a scheme, but the 3rd Circuit just cast some uncertainty to that strategy by holding that . . .  continued at  Severance Plan Litigation.


2018.04.19  Excessive Compensation Claims Proceed vs CBS Directors. A Delaware Chancery Court decision details "an extreme factual scenario" involving salary and bonus payments that CBS paid to Sumner Redstone during a time when it was well-publicized that his health was failing.  The lesson for corporate directors involves . . .  continued at Excessive Compensation Claims.


2018.04.17  Going Forward after Code 162(m) Changes.  It is one thing to recognize what changed, and another to take smart action in response. ISS has given some indication of what it expects. For discussion of these points and some ideas drawn from a teleconference that I co-hosted today, go to Code  162(m) Update 2018.


2018.04.07  Voluntary Severance Plan - Fidelity's Experience. What happens when 3,000 employees over age 55 receive a buy-out offer because they have more than 10 years of experience?  Fidelity made that offer, and its results do not surprise because . . .  continued at  Voluntary Severance Plans, with a discussion of how those buy-out plans can work - and backfire.


2018.02.07  "The Front Line in the War Against Sexual Harassment" explains why "For employers who agree that bad acts should have bad consequences, 2018 will be a good year in which to revisit what is placed at risk, and how that risk will materialize."  Further discussed at  Dismissals for Cause.

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