Executive Compensation   Loyalty  Business Issues

   Forms of Pay / Equity Awards


   Securities / Disclosure

   Survey Data

​   Tax  / ESOPs

   Tax-exempt Orgs

   Vesting and Forfeitures

   Restrictive Covenants  (state-by-state guide)


   Litigation by Executives  (ERISA litigation)

   Litigation against Disloyal Executives

   Shareholder Litigation  (vs corp directors)

   Accounting Rules



   M&A Transactions

   Pension Liabilities

​   ROBS

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Notable Developments as of 2018.11.18

2018.11.17  Broad-based Equity Awards: Does Amazon Lead Again?  In the equity award world, there is a regular debate about whether employers should make equity awards below the key employee level. For rank-and-file employees, cash bonuses and other workplace benefits (such as flexible hours) motivate better than low-levels of equity awards. Amazon seems to have reached that conclusion based on recent reports that RSU awards would be eliminated for . . . continued at  Stock Award Practices.

2018.11.12  M&A-related Executive Compensation Issues.  For the ABA's joint committee on employee benefits (JCEB), my Nov. 9th presentation was titled "Hot M&A Topics in Executive Compensation:From Avoiding Disasters to Making Deals Work."  For a copy of the PowerPoint or for questions relating to the impact of a merger or sale, feel welcome to send me  an email.   

2018.10.18  Eve of Vesting Termination - Equity Intervenes?  Following a stock purchase, an executive of the target company indicated his desire to leave when his employment agreement was scheduled to expire. The purchaser responded by terminating his employment one month beforehand, thereby preventing the executive from vesting in $425,000 of LTI benefits. The last paragraph of the 5th Circuit's decision seems to indicate . . . . continued with case link at  Stock Award and LTI Litigation.

2018.10.16  Tax Exempt Organizations: Governance Rules and Practical Advice.  Feel welcome to listen to this Wagner Law Webinar focused on the governance, design, and tax considerations that are particular to tax exempt organizations with respect to their executive compensation determinations and structures.  Just email Mark for a copy of our PowerPoint.  For relevant rules, survey data, and helpful resources, see Executive Compensation - Tax Exempt Orgs.

2018.09.30  Earn-out + ESOP Fiduciary Duty= SROF.  In Austin v. Commissioner, the Tax Court rejected arguments that two 47.5% shareholders were not taxable on their restricted stock awards at the time of grant because, quoting from the decision . . . continued atSubstantial Risk of Forfeiture (SROF).

2018.09.25  CalPERS, Executive Compensation . . . and Elizabeth Taylor!  These three may seem like strange bedfellows, but the nexus comes from this truism about executive compensation: shareholder outrage erupts in down markets, and evaporates during booms. Witness for example the efforts of CalPERS to awaken some pay-for-performance alignment. For the years 2011 through 2017, CalPERS voted "no" for say-on-pay about 16% of the time. In 2018, that "no" vote percentage leapt to . . . continued at Say on Pay.

2018.09.24  Beware "Entire Fairness": It Sets a High Bar for Decisions about Director and Officer Compensation.  In contrast to the fizzle that followed failed say on pay litigation, claims of excessive compensation not only have legs, but momentum.  Within past weeks, one pharma company settled such litigation, and another was sued based on allegations that tend to give rise to these cases, namely . . . continued at Director Compensation Litigation

2018.09.21  Executives Behaving Badly - Remedies under Virginia Law.  The fact pattern in a recent Virginia case was not atypical: a senior executive allegedly misled his employer into paying him excessive bonuses.  For a detailed discussion of the potential claims by which employers may seek recovery, see  this link.

2018.08.28  Defusing the Litigation Risks relating to Executive Compensation Plans and Awards.  Here is a link to a webinar during which Wagner Law partners David Gabor (employment) and Mark Poerio (executive compensation) teamed up to discuss a variety of possible changes that employers could readily make to their stock plans and awards, and other benefit plans, in order to reduce their litigation risks as well as position to better enforce loyalty-related covenants such as non-competes, non-solicits, and trade secret protections. For a copy of the PowerPoint, just send Mark an email.  For further info, see Executive Compensation Litigation.

2018.08.23  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.  One recent lawsuit second-guesses the employer's financial calculations (alleging manipulation), and another involves Panera Bread's back-end addition of a maximum limit.  Well-drafted plans and programs include significant employer protections. But some defects can haunt, as shown in the cases discussed under  Litigation - Bonuses

2018.08.21  IRS 162(m) Guidance Brings Little Relief - Headache re Negative Discretion. Today, the IRS released Notice 2018-68, which addresses questions raised by changes to Code Section 162(m) as part of the Tax Cuts and Jobs Act of 2017. For a link to the notice and further information, including its provisions relating to "negative discretion," follow this link.

2018.08.04  Deferred Compensation Data - and Its Implications.  Regarding how employers have responded to 2017's tax reform act, the Plan Sponsor Council of America has issued a press release that presents intriguing survey data.  Several are reproduced, with insights drawn from them, at Deferred Compensation.


Notable Updates in 2018:

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