Headlines about "Executive benefits"

Gathered from the web by the editors at BenefitsLink.com.
SEC May Tighten Executive Pay Rules
Excerpt: "U.S. securities regulators are considering changing how companies are required to disclose stock options awarded to executives, people familiar with the Securities and Exchange Commission's thinking told Reuters on Tuesday. At an SEC meeting on Wednesday, the commissioners also will propose giving investors a greater voice in setting executive pay at companies that were given taxpayer funds under the U.S. government's Troubled Asset Relief Program. Among the possible changes is a revision to how companies value equity awards in the 'summary compensation table' for top executives that they file with the commission each year. The SEC is considering requiring companies to include the estimated value for stock options granted during the year, the people said. The sources requested anonymity because the proposal is still being crafted and may change." (Reuters)

SEC Votes on New Executive Compensation Disclosure Proposals
Excerpt: "The Securities and Exchange Commission voted on Wednesday to propose sweeping new disclosure rules about a company's leadership and compensation practices. According to the Wall Street Journal, the proposed rules, approved for consideration in a 5-0 vote, would require public companies to include information in proxy and information statements about an array of things, such as the relationship of a company's overall compensation policies to risk and the background and qualifications of directors, executive officers and nominees . . . ." (PLANSPONSOR.com; free registration required)

[Guidance Overview] New TARP Executive Compensation Rules: Who's Covered
Excerpt: "This Alert focuses on two fundamental threshold questions: (1) which entities and programs are generally covered by the executive compensation standards under TARP; and (2) which TARP requirements apply to which entities, and when do covered entities escape such coverage?" (K&L Gates LLP)

[Guidance Overview] New TARP Executive Compensation Rules: Who's Covered
Excerpt: "This Alert focuses on two fundamental threshold questions: (1) which entities and programs are generally covered by the executive compensation standards under TARP; and (2) which TARP requirements apply to which entities, and when do covered entities escape such coverage?" (K&L Gates LLP)

[Guidance Overview] New TARP Executive Compensation Rules: Who's Covered
Excerpt: "This Alert focuses on two fundamental threshold questions: (1) which entities and programs are generally covered by the executive compensation standards under TARP; and (2) which TARP requirements apply to which entities, and when do covered entities escape such coverage?" (K&L Gates LLP)

[Guidance Overview] New TARP Executive Compensation Rules: Who's Covered
Excerpt: "This Alert focuses on two fundamental threshold questions: (1) which entities and programs are generally covered by the executive compensation standards under TARP; and (2) which TARP requirements apply to which entities, and when do covered entities escape such coverage?" (K&L Gates LLP)

Shareholder Empowerment Act of 2009 Introduced
Excerpt: "On June 12, 2009, U.S. Representative Gary Peters (D-MI) introduced the Shareholder Empowerment Act of 2009 (the Peters bill). The full text of the bill can be found here. The bill comes one month after the introduction of the Shareholder Bill of Rights Act of 2009 (the Schumer bill) by U.S. Senator Charles Schumer (D-NY), summarized in this WSGR Alert. Like the Schumer bill, the Peters bill, if adopted, would dramatically alter the corporate governance of U.S. public companies. . . . The Peters bill, however, goes further than the Schumer bill on certain executive compensation issues. A summary of the Peters bill is found [in the target document], followed by a chart comparing the two bills." (Wilson Sonsini Goodrich & Rosati)

Chrysler Bankruptcy Cuts Deep Into Retirees' Pensions
Excerpt: "The collapse of the old Chrysler isn't just hitting the folks on the line. Federal law protects pension funds held in qualified plans from the company's creditors in bankruptcy. But a non-qualified plan participant technically becomes an unsecured creditor in a bankruptcy case. Executives and other managers can be offered a non-qualified plan once the company and/or the employee already has hit the limits for funding contributions into qualified plans. Then, bonus money or other compensation can apply to nonqualified plans. Trouble can hit, though, once companies go through bankruptcy." (Detroit Free Press)

[Guidance Overview] Interim Final Rule on Executive Compensation Restrictions for TARP Recipients (PDF)
7 pages. Excerpt: "On June 10, 2009, the Treasury Department issued an interim final rule on the executive compensation restrictions for companies receiving federal assistance under the Troubled Asset Relief Program (TARP). Among other things, the regulations establish a Special Master, prohibit tax gross-ups, require adoption of an excessive or luxury expenditures policy, expand clawback provisions, place additional prohibitions on bonuses and incentive compensation for senior executive officers and certain highly compensated employees, and implement more rigorous requirements for companies receiving 'exceptional financial assistance.'" (Buck Consultants)

[Guidance Overview] Non-Qualified Plans under the Interim Final Rules of TARP/EESA/ARRA
Excerpt: "As I noted on June 15, 2009, the new EESA/ARRA Interim Final Rules on Executive Compensation for TARP institutions shot down nearly every proposed strategy or work around that practitioners had devised for dealing with the more onerous EESA/ARRA TARP restrictions. One of the options taken off the table by the recently issued TARP Interim Final Rules is an employer contribution to, or benefit accrual under, a non-qualified deferred compensation plan." (Michael Melbinger via Winston & Strawn LLP)

[Guidance Overview] July 1, 2009, Is a Key Date for Section 457A Transition Relief
Excerpt: "Companies with significant non-U.S. income, and partnerships that include foreign or tax-exempt partners, will need to assess whether new Internal Revenue Code Section 457A applies to their deferred compensation plans. If so, they will need to decide whether to take advantage of transition relief by amending plans to provide for immediate vesting before July 1, 2009." (Seyfarth Shaw LLP)

[Guidance Overview] 'Say on Pay' Votes to Become Mandatory Under Obama Administration Proposal (PDF)
3 pages. Excerpt: "On June 17, President Barack Obama proposed broad changes to the manner in which the U.S. government supervises financial markets. Among the numerous elements of the administration's plan is a requirement that public companies implement 'say on pay' rules, under which they would submit executive compensation packages to a nonbinding vote of their shareholders. The brief description contained in the plan suggests that the 'say on pay' requirement would extend to all public companies, regardless of size, though details of the proposal and the timing of any eventual adoption have not yet been announced." (Morgan, Lewis & Bockius LLP)

[Guidance Overview] TARP Compensation Guidance and Other Executive Compensation Proposals
Excerpt: "The Department of the Treasury, the Securities and Exchange Commission, and Congress have continued their assault on executive compensation practices. Some of these recent measures will have an immediate impact on TARP recipients, while other actions prescribe guidelines or principles or set forth proposals for further consideration, all of which may influence or subsequently change compensation disclosure and 'best' practices for all public companies." (Jones Day)

[Guidance Overview] TARP Guidance on Compensation and Corporate Governance from Treasury (PDF)
11 pages. Excerpt: "This letter discusses the provisions of the interim final rule applicable to TARP recipients that received financial assistance under the Capital Purchase Program. The discussion of the extensive provisions of the interim final rule, after explaining who is a 'covered employee,' is organized into two main topics: (1) the provisions that affect the compensation of covered employees and (2) the provisions that impose structural limits and administrative procedures with respect to executive compensation." (Frederic W. Cook & Co., Inc.)

[Guidance Overview] Treasury Dept. Equity Purchases Under EESA Are Not Code Sec. 409A Permissible Payment Events
Excerpt: "CCH Note: This guidance does not address whether a Treasury equity acquisition transaction under EESA is a change in ownership or effective control, or a change in the ownership of a substantial portion of the assets of the corporation, for any other purpose. . . . The IRS intends to amend the regulations under Code Sec. 409A to incorporate this guidance. The guidance is effective for, and the amended regulations will be applicable to, Treasury equity acquisition transactions pursuant to EESA occurring on or after June 4, 2009." (Wolters Kluwer)

Administration Proposal for Financial Regulatory Reform Contains Several Items Related to Executive Compensation
Excerpt: "{Example:] Under the topic 'Promote Robust Supervision and Regulation of Financial Firms,' and the subheading 'Strengthen Capital and Other Prudential Standards Applicable to All Banks and BHCs,' the Administration repeats its intention (from the June 10 proposal) to focus on five principles to better align compensation practices with the interests of shareholders and the stability of firms and the financial system." (Michael Melbinger via Winston & Strawn LLP)

Alabama Cancels Deferred Compensation Plan with Nationwide
Excerpt: "The State Personnel Board cited a lack of financial transparency Wednesday when it canceled a contract with Nationwide Retirement Solutions to provide a deferred compensation plan for active and retired state workers in Alabama. The board voted 3-0 to cancel the contract, with board members saying the company is not providing financial information they want." (AP via Forbes.com)

New EESA/ARRA Interim Final Rules on Executive Compensation for TARP Institutions
Excerpt: "Later in the week I will provide a link to a full summary of the new Interim Final Rules. Until then I summarize below the many refinements in the new Rules that went against TARP institutions. In fact, the new Rules shot down nearly every proposed strategy devised by practitioners for dealing with the more onerous EESA/ARRA TARP restrictions." (Michael Melbinger via Winston & Strawn LLP)

[Guidance Overview] Obama Administration Outline of Executive Compensation Guidelines and Legislative Initiatives (PDF)
3 pages. Excerpt: "While boards of directors and compensation committees have recognized that compensation practices are now under intense scrutiny, there have been no mandated changes to public companies' existing practices, except for financial institutions receiving funds under the United States Treasury Department's Troubled Asset Relief Program ('TARP'). Now the Obama Administration is proposing legislation that would continue the regulatory course begun with the Sarbanes-Oxley Act ('SOX'), mandating changes in corporate governance for all public companies." (Locke Lord Bissell & Liddell LLP)

[Guidance Overview] Treasury Secretary Signals Direction of Executive Compensation Reform (PDF)
4 pages. Excerpt: "Treasury Secretary Tim Geithner issued a public statement on June 10, 2009 outlining five broad-based principles intended to bring compensation practices more in line with the interests of shareholders and reinforce the stability of firms and the financial system. Along with the statement of principles, Treasury released two fact sheets ? one on shareholder 'say-on-pay' and one on compensation committee independence." (Buck Consultants)

[Guidance Overview] Revenue Ruling 2008-13 Reminder: Review Bonus Plans Intended to Provide Qualified Performance-Based Compensation under IRC ? 162(m)
Excerpt: "In PLR 200804004, the IRS departed from previous PLRs and held that compensation paid pursuant to a plan's provision that permits payment without regard to whether the performance goals are met in the event the employee is terminated without cause or terminates for good reason would be subject to IRC ? 162(m) disallowance even if the performance goals were satisfied." (Deloitte via BenefitsLink.com)

[Guidance Overview] Treasury Outline of Compensation Practices Reform and Interim Final Rule on TARP Compensation Standards (PDF)
6 pages. Excerpt: "On June 10, the U.S. Department of Treasury . . . outlined a set of broad-based principles regarding compensation practices for companies to follow, particularly those companies in the financial sector, which it believes will encourage sound risk management, long-term growth, and value creation; align compensation practices with the interests of shareholders; and ultimately reinforce the stability of firms and the financial system. The Treasury Department specifically stated that its intention is not to cap pay. The principles are as follows: Compensation plans should properly measure and reward performance; Compensation should be structured to account for the time horizon of risks; Compensation practices should be aligned with sound risk management; Golden parachutes and supplemental executive retirement benefits should be reexamined to determine whether they align the interests of executives with shareholders; Transparency and accountability should be promoted in the process of setting compensation[.]" (Morgan, Lewis & Bockius LLP)

[Guidance Overview] Executive Compensation and Corporate Governance Standards for TARP Recipients
Excerpt: "The new interim final rule will be effective upon publication in the Federal Register, which is expected to occur on Monday, June 15. The new interim rule clarifies that the executive compensation and corporate governance standards described in the rule generally do not apply until the final rule is formally published in the Federal Register. The only exception is the 'say on pay' shareholder resolution, which became effective on February 17, 2009 (the date ARRA was enacted)." (McGuireWoods LLP)

Reining in Executive Compensation
Excerpt: "While the administration is keeping a hands-off approach, thus far, to imposing salary ceilings on all companies, there continues to be increased focus on more transparency for executive compensation. New rules expected to be released by the SEC in July will mandate additional proxy-statement disclosures, including 'say on pay' and information about potential conflicts of interest by comp consultants." (Human Resource Executive Online)

[Guidance Overview] Final Executive Compensation Rules for TARP Recipients and Proposed Legislation for All Public Companies (PDF)
6 pages. Excerpt: "The Interim Final Rule (the 'Rule') consolidates and supersedes the prior executive compensation guidance and adopts additional standards. Generally, the provisions of this Rule are effective immediately upon publication in the Federal Register (scheduled for June 15th), and to the extent previous contractual provisions are not inconsistent, such provisions shall remain effective and continue to apply to TARP recipients. For example, TARP recipients that agreed not to claim a deduction for compensation during a taxable year in excess of $500,000 for certain executive officers shall continue to be required to forego such deduction. On the same day that the Rule was released, Treasury announced that it will pursue two pieces of executive compensation legislation that would apply to all public companies." (Groom Law Group)

Salaried Chrysler Retirees Get Some Good News on SERP
Excerpt: "According to the Detroit Free Press, about 1,000 salaried employees who had non-qualified pension benefits through the automaker's Supplemental Executive Retirement Plan faced losing all those benefits because of the bankruptcy. But, according to the report, Chrysler said Friday that those benefits would be resumed in full until the salaried retiree reaches age 62. Salaried retirees who are 62 or older, though, still would lose those specific pension benefits. About 700 salaried retirees in that group are 62 and older now; the rest are under age 62, according to the Free Press." (PLANSPONSOR.com; free registration required)

[Guidance Overview] Pfizer Dealt Setback in Severance Benefit Court Battle
Excerpt: "A federal judge in New Jersey ruled against Pfizer in a dispute over severance benefits arising out of the deal for it to acquire rival Pharmacia. U.S. District Judge Stanley R. Chesler of the U.S. District Court for the District of New Jersey asserted that Pfizer improperly denied $158,250 in benefits to former Pharmacia Corp. Director Vasantha Nair when Nair was stripped of her job responsibilities. Chesler rejected Pfizer's argument that Nair maintained the same job title and compensation and did not suffer a demotion as a result of the deal; a demotion is often a triggering event to pay benefits." (PLANSPONSOR.com; free registration required)

[Guidance Overview] Obama Administration Releases Executive Compensation Principles and Proposals for U.S. Public Companies (PDF)
6 pages. (Frederic W. Cook, Inc.)

[Guidance Overview] Treasury Department and SEC Announce New Executive Compensation Initiatives
Excerpt: "The U.S. Department of the Treasury and the Securities and Exchange Commission (SEC) recently announced several initiatives that affect all public companies regardless of whether they participate in the Troubled Asset Relief Program (TARP) under the Emergency Economic Stabilization Act of 2008 (EESA) as modified by the American Recovery and Reinvestment Act of 2009 (Recovery Act)." (McDermott Will & Emery)

GM Slashes Pensions at the Top
Excerpt: "General Motors Corp. is making dramatic reductions in the pensions of some of its outgoing high-level executives -- a move that is expected to cost ousted CEO Rick Wagoner up to $15 million. GM President and CEO Fritz Henderson confirmed Friday that pensioners whose yearly payments are $100,000 or less will lose nothing. But those who get more will receive a third of what they had expected in excess of $100,000. No one is likely to lose as much as Wagoner, who was fired more than two months ago by President Barack Obama." (The Detroit News)

Employee Ownership Update for June 12, 2009
NCEO Executive Director Corey Rosen discusses Cleveland's plan to create worker-owned cooperatives in the green business sector; fellowships awarded by Rutgers University to study shared capitalism; the performance of companies in the Employee Ownership Index published by Field Fisher Waterhouse LLP; a study finding that executive equity ownership among company founders has declined in pre-IPO companies; and a proposal to escrow a portion of executive equity compensation for a defined period. (National Center for Employee Ownership)

Executives Unruffled by Administration's Proposed Compensation Rules
Excerpt: "While the White House's new so-called special master for compensation, prominent Washington lawyer Kenneth R. Feinberg, has been given unprecedented powers to set pay at seven of the most troubled firms, the plan that was laid out Wednesday largely maintains the status quo for compensation practices at all other publicly traded companies, including hundreds that are receiving taxpayer assistance. In addition, the administration got rid of a previously announced $500,000 salary cap at financial firms that in the future take the kind of exceptional assistance that firms such as Citigroup and Bank of America have received." (The Washington Post; free registration required)

[Guidance Overview] More on the Obama Administration's Proposal to Reform Executive Compensation
Excerpt: "As promised yesterday, this Blog will include more detail on the Obama Administration's five point program for reforming the executive compensation. Note, this proposal is intended to apply beyond the financial services industry." (Michael Melbinger via Winston & Strawn LLP)

[Guidance Overview] IRS Addresses Certain Nonqualified Deferred Comp Payments in Stock Transactions with Financial Entities
Excerpt: "In Notice 2009-49, the IRS explains that it anticipates that most of the financial institutions involved in TARP equity acquisition transactions are, and will be, sponsors of nonqualified deferred compensation plans subject to Sec. 409A. The agency then states, 'The Treasury Department and IRS have determined that a Treasury EESA equity acquisition transaction is not a change in control event under section 409A and the final regulations. Treating a Treasury EESA equity acquisition transaction as a change in control event and, therefore, a permissible payment event, would be inconsistent with the purposes of EESA and section 409A, and would be contrary to the public interest." (Wolters Kluwer)

[Official Guidance] Treasury Department Fact Sheet on Compensation Committee Independence (PDF)
Excerpt: "We will propose legislation that will give compensation committees greater independence, just as Sarbanes-Oxley did for audit committees. The legislation will direct the SEC to promulgate rules requiring companies listed on national securities exchanges to meet exacting standards for independence. Under these rules, not only would compensation committee members be truly independent from management, but the committee's compensation consultants and legal counsel would be answerable only to the committee." (U.S. Department of the Treasury via American Benefits Council)

[Official Guidance] Treasury Department Fact Sheet on Say-on-Pay Measures (PDF)
Excerpt: From the 4th item on the factsheet: 'Shareholders will have the right to cast a non-binding vote on golden parachutes: Consistent with the say-on-pay legislation President Obama co-sponsored while in the Senate, shareholders will have the opportunity to cast a non-binding vote to approve or disapprove golden parachute compensation disclosed in proxy solicitation materials prepared for shareholder meetings relating to a merger, acquisition, or other transaction that may involve a change in control of the corporation." (U.S. Department of the Treasury via American Benefits Council)

Opening Statement to House Committee by Treasury Counselor Gene Sperling Addressing Federal Executive Compensation Controls
Excerpt: "Our goal is to help ensure that there is a much closer alignment between compensation, sound risk management and long-term value creation for firms and the economy as a whole. Our goal is not to have the government micromanage private sector compensation. . . . We also recognize these principles may evolve over time, and we look forward to engaging in a discussion with this Committee, the Congress, supervisors, academics and other compensation experts, shareholders and the business community about the best path." (U.S. Department of the Treasury)

[Official Guidance] Text of Interim Final Regs on TARP Standards for Executive Compensation and Corporate Governance (PDF)
123 pages; this version was announced by the Department of the Treasury to the public in a press release on June 10. The press release includes an overview of the rules; it is online at http://www.treas.gov/press/releases/tg165.htm (Internal Revenue Service)

Obama Administration to Unveil 'Say on Pay' Measure
Excerpt: "Administration officials have suggested legislation to give shareholders and federal securities regulators more of a say on executive compensation at publicly traded companies." (PLANSPONSOR.com; free registration required)

[Opinion] Protecting Non-Qualified Deferred Compensation: The Secular Trust
Excerpt: "[In addition to economic conditions and the complexities of 409A, other factors aiding the] resurgence in the use of secular trusts are: Rev. Rul. 2007-48, which coherently laid out the tax rules that apply to each party under a secular trust. The certainty of taxation is an important objective for companies and executives alike (and trustees too). The likelihood of rising income and social security tax rates in the future (maybe accelerating income into 2009 is not such a bad idea?), and The difficult economy (a secular trust is the only way to protect non-qualified plan benefits from the claims of creditors)." (Michael Melbinger via Winston & Strawn LLP)

[Guidance Overview] A Sidebar to Journal of Accountancy Article: 'Executive Compensation: What's Reasonable?'
Excerpt: "[In the 1983 decision by the Ninth Circuit Court of Appeals in Elliotts Inc. v. Commissioner, t]he court considered a company's profitability to be persuasive when it can be attributed to the proven capability and efforts of an owner/employee. The court considered five factors in determining the nature and quality of that person's services: his or her role in the company (position, duties, hours worked and general importance to the company's success); an external comparison (what similarly situated corporations pay for similar services); the character and condition of the company (sales, net income and capital value in light of complexities of the business and general economic conditions); conflicts of interest (whether the relationship between the company and the owner/employee might bias the salary level); and internal consistency (comparing the owner/employee's pay to that of other employees)." (American Institute of Certified Public Accountants)

Executive Compensation: What's Reasonable?
Excerpt: "One factor in determining reasonable compensation that has gained prominence in some circuits, particularly the Seventh, is the value of the employee's contributions as reflected in the return on equity (ROE) of a hypothetical independent investor in the corporation, and the effect of that compensation on ROE. These are calculations CPAs are well-equipped to assist companies in making." (American Institute of Certified Public Accountants)

SEC Updates Executive Pay Disclosure Guidance, Considers Rule Changes
Excerpt: "New SEC Compliance & Disclosure Interpretations (C&DIs) clarify executive pay disclosures under Regulation S-K -- and contain some surprises. Issues addressed include how to fill out the Summary Compensation Table for NEOs serving fewer than three years, when to report tax gross-ups, whether to disclose life insurance proceeds, and how to calculate and report various equity incentives. In recent remarks, the SEC chair indicates the commission also is considering a variety of changes to expand and revise its executive pay disclosure rules." (Mercer LLC)

White House to Appoint Pay Czar, Issue Guidance on TARP Restrictions
Excerpt: "The Obama administration is expected to soon appoint Kenneth Feinberg to oversee executive pay curbs that apply to companies participating in the Troubled Assets Relief Program (TARP). As 'special master for compensation,' Feinberg will play a large role in the implementation of impending guidance on the complex TARP pay restrictions, which apply to incentive pay that encourages 'unnecessary and excessive' risks, golden parachutes, tax deductions for pay, clawbacks and bonuses." (Mercer LLC)

[Opinion] More Funny Business with Executive Stock Trading?
Excerpt: "As a follow up to [the June 4] Blog on 10b5-1 plans gone bad, I wanted to draw readers' attention to the results of another academic study reported in The Wall Street Journal yesterday ('Executives' Stock Deals Preceded Price Drops,' p. C1). This study found a 'statistically significant' difference (8% in this study) between the stock prices of companies in the year following the date an executive entered into a prepaid variable forward contract, when compared to a peer group of similar companies where no executive entered into such a contract." (Michael Melbinger via Winston & Strawn LLP)

[Guidance Overview] Federal Government's Acquisition of Equity Interests Does Not Constitute 409A Payment Event
Excerpt: "On June 4, 2009, the Internal Revenue Service (IRS) released Notice 2009-49 clarifying that, for purposes of Section 409A of the Internal Revenue Code, the U.S. Department of the Treasury's acquisition of equity interests in a financial institution or other entity under the Emergency Economic Stabilization Act of 2008 (EESA) does not constitute a permissible change in control payment event. The notice, which is immediately effective, is available at http://www.irs.gov/pub/irs-drop/n-09-49.pdf." (McDermott Will & Emery)

Shartsis Friese versus JP Morgan Over Funding Fiasco
Excerpt: "Shartsis Friese squared off against JP Morgan Retirement Services in San Francisco federal court Monday over who was responsible for six years of miscalculated contributions to the San Francisco firm's deferred compensation and profit-sharing plan. The firm says its plan contributions didn't meet IRS rules because of bad advice from its outside benefits consultant. The firm said it has had to spend $1.2 million to bring the fund back into compliance." (Law.com)

Higher Income Taxes and Economic Uncertainty Make It Harder to Decide When to Defer Compensation: Here Are Some Guidelines
Excerpt: "While deferred comp plans may encompass both salary and bonus for high-paid employees, most deferrals are just for bonuses. June 30 is the deadline for deciding whether to defer 2009 performance-based bonuses. But the economic uncertainties are so great that many people are deciding to take the cash. After all, if you defer, you won't have access to that money if you need it." (BusinessWeek)

[Guidance Overview] SEC's Interpretive Guidance on New Executive Compensation Disclosure Rules (PDF)
6 pages. Excerpt: "The staff of the Securities and Exchange Commission (SEC) on January 24, 2007, issued interpretive guidance on the new executive and director compensation proxy disclosure rules. The guidance was updated on August 8, 2007, July 3, 2008, and further updated on May 29, 2009. The guidance is in the form of questions and answers of general applicability to the disclosure rules, as well as interpretive responses regarding particular situations. The guidance replaces staff interpretations issued in previous years, and is drafted in a manner that facilitates periodic future updates. The interpretative guidance is briefly summarized [on the target page] with the May 29, 2009 guidance presented in italics." (Frederic W. Cook, Inc.)

[Guidance Overview] Monthly Regulatory Round-Up on Executive Compensation, May 2009 (PDF)
Monthly Regulatory Round-Up on Executive Compensation, May 2009 3 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during May 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)

[Guidance Overview] IRS Says Treasury's Acquisition of Equity Under TARP Not a Change of Control for Section 409A (PDF)
Excerpt: "The IRS has issued Notice 2009-49, which clarifies that for purposes of Internal Revenue Code Section 409A, an acquisition by the Treasury Department of preferred stock, common stock, warrants or other equity rights in a financial institution or other entity under the Emergency Economic Stabilization Act of 2008 (a 'Treasury EESA Equity Acquisition Transaction') is not considered a change in ownership or effective control, or a change in ownership of a substantial portion of the assets of the corporation. Therefore, it is not a permissible payment event under Section 409A." (Buck Consultants)

Gliche in the 409A Regulations Created by EESA
Excerpt: "The Treasury could not have foreseen that it would have to carve out an exception under the 409A change in control rules for the federal government acquiring interests in financial institutions. Hence the issuance of Notice 2009-49 announcing future changes to the 409A regulations . . . ." (Attorney B. Janell Grenier via Benefitsblog.com)

New 457A Tax Rules Overview: Nonqualified Deferred Compensation Plans
Excerpt: "Unlike Section 409A, Section 457A does not allow conditions relating to the purpose of the compensation (such as performance conditions) to constitute a substantial risk of forfeiture. Therefore, deferred compensation arrangements that an employer has already determined to be exempt as a 'short-term deferral' arrangement under Section 409A on the basis of a performance-based vesting condition may need to be reexamined to see whether they present issues under Section 457A." (McGuireWoods LLP)

[Guidance Overview] Updated Guidance Issued by SEC on New Executive and Directory Compensation Proxy Disclosure Rules (PDF)
6 pages. Excerpt: "The staff of the Securities and Exchange Commission (SEC) on January 24, 2007, issued interpretive guidance on the new executive and director compensation proxy disclosure rules. The guidance was updated on August 8, 2007, July 3, 2008, and further updated on May 29, 2009. The guidance is in the form of questions and answers of general applicability to the disclosure rules, as well as interpretive responses regarding particular situations. The guidance replaces staff interpretations issued in previous years, and is drafted in a manner that facilitates periodic future updates. The interpretative guidance is briefly summarized below . . . ." (Frederick W. Cook & Co., Inc.)

[Official Guidance] Text of IRS Notice 2009-49: Receiving Bailout Funds Doesn't Trigger Change in Control Under Sec. 409A (PDF)
Notice 2009-49 provides that, if the Treasury Department (or an entity acting on its behalf) acquires preferred stock, common stock, warrants to purchase common stock or other types of equity of a financial institution or other entity pursuant to the Emergency Economic Stabilization Act of 2008, then such acquisition is not a change in control event with respect to which a payment can be made under a nonqualified deferred compensation plan pursuant to ? 409A(a)(2)(A)(v) of the Internal Revenue Code. (Internal Revenue Service)

Guidance on Short-Selling by Executives Is Needed, GAO Says
Excerpt: "Actions taken by the Securities and Exchange Commission at the height of the market turmoil last year appear to have reduced abusive short-selling, but the agency should provide clearer guidance to the brokerage industry for applying the rules, congressional auditors concluded in a report issued Wednesday." (Washington Post; free registration required)

Relax Restrictions on Shareholders Lawsuits Over Executive Compensation, House Subcommittee Chairman Urges
Excerpt: "Shareholders should be given more power to bring lawsuits against companies for paying excessive compensation to executives, the chairman of the House subcommittee that has jurisdiction over securities matters said Tuesday, June 2." (Workforce.com)

Alive and Well in 2009? 'Reasonable Compensation' Requirement for Deductibility of Executive Pay
Excerpt: "2009 may well be the year of reasonable compensation limitations. Recent outrage by Congress and the public over bonuses paid to AIG employees and over 'excessive' compensation in general, has produced a climate in which reasonable compensation limits may become meaningful." (BNA Tax Management Inc.)

[Guidance Overview] Companies Should Consider Installing New Deferral Plans Before July 1 to Maximize 2009 Compensation Deferral Opportunities
Excerpt: "Although ?409A imposes strict rules on the timing of employee deferral elections, there may still be opportunities for companies to establish nonqualified deferred compensation arrangements for certain 2009 compensation amounts. This may particularly be the case with respect to certain performance bonuses for calendar year 2009." (BNA Tax Management Inc.)

[Guidance Overview] IRS Provides Guidance on PPA Rules for Employer-Owned Life Insurance (PDF)
4 pages. Excerpt: "The Internal Revenue Service has published guidance, in question-and-answer format, on a number of outstanding issues arising under the new rules for certain employer-owned life insurance contracts enacted in the Pension Protection Act of 2006 (PPA). New Notice 2009-48 provides the first substantive guidance on these provisions." (Sutherland)

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