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News Items, by Subject

Executive benefits

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[Guidance Overview] SEC Solicits Comment on Modernizing Rules Related to Compensatory Securities Offerings and Sales
"The Concept Release solicits comments on questions relating to: [1] 'Gig economy' relationships, or new types of contractual relationships between companies and individuals involving alternative work arrangements, to better understand how they work and determine what attributes of these relationships potentially may provide a basis for extending eligibility for the Rule 701 exemption. [2] Whether the SEC should further revise the disclosure content and timing requirements of Rule 701(e). [3] Whether the use of Form S-8 to register the offering of securities pursuant to employee benefit plans should be further streamlined." (Thomson Reuters Practical Law)
[Official Guidance] Text of SEC Concept Release and Request for Comment on Compensatory Securities Offerings and Sales (PDF)
"Since Rule 701 and Form S-8 were last amended, forms of equity compensation have continued to evolve and new types of contractual relationships between companies and the individuals who work for them have emerged. In light of these developments ... we believe this is an appropriate time to revisit the Commission's regulatory regime for compensatory securities transactions. We therefore solicit comment on possible ways to update the requirements of Rule 701 and Form S-8, consistent with investor protection. We also solicit comment on what effects any revised rule or form may have on a company's decision to become a reporting company." (U.S. Securities and Exchange Commission [SEC])
Executive Retirement Vehicle Seen as a Potential Gamble for Employers (PDF)
Qualifed supplemental executive retirement plans (Q-SERPs) can help some public companies looking to mitigate their losses following the changes to section 162(m) in the Tax Cuts and Jobs Act... However, [some] have criticized Q-SERPs ... by indicating that the vehicles exploit loopholes in the nondiscrimination regulations and have been targeted by the IRS in the past." (Employee Benefit Plan Review)
SEC Provides Disclosure Relief, Considers Employee Stock Purchase Rules
"The SEC voted ... to provide disclosure relief for certain securities offerings related to employee compensation, and to seek public comment on ways to modernize its rules for employee stock compensation. Rules adopted [July 18] raised the threshold for the aggregate sales price or amount of securities sold in compensatory arrangements that require an issuer to deliver additional disclosures to investors ... from $5 million to $10 million for any 12-month period." (Journal of Accountancy)
[Guidance Overview] Privately Held Companies and the SEC: New Legislation Doubles Rule 701 Soft Cap Limit
"Under the new law the $5 million 'soft cap limit' for Rule 701 exemption from additional disclosures required by Rule 5 has been increased. In fact, the limit has doubled.... This change should make it easier -- particularly for larger privately held companies -- to offer share-based compensation to their employees without bumping up against the enhanced Rule 701 cap limits." (Holifield Janich Rachal Ferrera, PLLC)
CEO Compensation in the Largest U.S. Companies
"[T]he long-term incentive (LTI) grant value/opportunity -- that is, not the eventual payout value -- has increased anywhere from approximately 3-8% annually, depending on the year and the industry.... LTI payouts can be two or three times the size of the initial grant value. Couple this with the fact that LTI grants make up more than a majority of the total annual pay opportunity for CEOs, and it is clear that perceived high pay levels are largely due to the long-term incentive pay component." (Meridian Compensation Partners, LLC)
SEC Sanctions Dow Chemical for Undisclosed Perquisites
"The SEC issued a cease-and-desist order against The Dow Chemical Company for failing to disclose approximately $3 million in executive perquisites in the company's proxy statements. The SEC imposed the sanctions agreed to in Dow's settlement offer, which include extensive undertakings to ensure future compliance and a $1,750,000 civil monetary penalty." (Thomson Reuters Practical Law)
How Do I Report Non-Qualified Plan or Severance Payments to a Former Employee?
"[If] the employer makes any non-qualified or severance payments to a person that are connected with or result from employee status, then such payments should be reported on Form W-2. That requirement applies regardless of when those payments are made (whether at termination or many years after).... [S]uch payments only belong on a Form 1099-MISC if the individual earned or became entitled to those amounts as a result of non-employee status, such as service as a non-employee director or independent contractor." (Foley & Lardner LLP)
Unique 162(m) Considerations for Financial Institutions
"One [strategy is] a voluntary or automatic deferral of restricted stock units (RSUs) or the payout of short-term incentive plan payments in the form of deferred RSUs. The deferral would essentially convert the RSUs into a promise to distribute shares of the company's stock in the future, generally after the executive's retirement or other employment termination. After termination, the distribution of the stock could be spread over a period of years, in an effort to create distributions/payouts less than $1 million per year, which should be deductible." (Winston & Strawn LLP)
Tax Reform Developments: Making Provisions For Individuals Permanent, Capital Gains Indexing
"The provisions in the [TCJA] that changed individual taxation and affect stock compensation are all scheduled to end after 2025 ... Republicans in the House of Representatives plan to vote on making the provisions permanent (Tax Reform 2.0), ... The legislation may also include some favorable tax changes related to retirement plans and may increase the amount of tax-free benefits companies can provide for education assistance and student-loan repayment[.]" (
[Guidance Overview] Excise Tax Problems with Excess Executive Comp? Retirement Compensation May Help
"Effective Jan. 1, 2018, the Tax Cuts and Jobs Act created an excise tax ... to be imposed on tax-exempt organizations and governmental entities. At first glance, this section ... appears to target the highest paid employees at universities, colleges and hospitals, but because of the amounts that count toward the threshold and the number of employees that can trigger the excise tax, many unsuspecting entities are at risk. Fortunately, there may be opportunities to avoid these excise taxes through planning with retirement plans." (Carlton Fields)
Primary Components to an Effective Long Term Incentive Plan (PDF)
"[1] Determine business drivers that trigger awards....[2] Determine what level of executive should be eligible to participate.... [3] Determine Share Rates.... [4] Allocation of Award among Eligible Group.... [5] Award Distribution." (Fulcrum Partners LLC)
Blockchain Tokens as Compensation
"[Tokens] are being used like equity or phantom-equity awards, granted as compensation for past or future services. They may be subject to vesting based on continued service or achievement of performance targets, and acceleration of vesting can be triggered based on designated events, such as the occurrence of a change of control transaction, the termination of an employee without cause, or the achievement of technical milestones." (Jackson Lewis P.C.)
Deal-Breaking M&A Issues Related to Employee Benefit Plans and Executive Compensation
"[S]ellers may defuse risks and streamline negotiations through proactive pre-sale planning.... [B]uyers are able to maximize their deal-related protections (and their post-closing alternatives) by assuring early stage attention to the items listed ... [This] list merely illustrates the range of benefit plan issues that may interfere with a change in corporate control (CIC) transaction. Disclosure schedules will often suggest other material issues, such as benefit plan defects and potential liabilities." (The Wagner Law Group)
[Official Guidance] Text of FASB ASU 2018-07: Stock Compensation (Topic 718) -- Improvements to Nonemployee Share-Based Payment Accounting
188 pages. "The areas for simplification in this Update involve several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation -- Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities." (Financial Accounting Standards Board [FASB])
Could Your 401(k) or Pension Plan Help Mitigate the Loss of Deductions Under Section 162(m)?
"The QSERP or SERP-Swap was a highly tax-efficient method for providing deductible and secure compensation for executive employees under a tax-qualified 401(k) or pension plan ... The possibility of providing additional tax deductible benefits to executives under a pension plan is a strategy that may not work for most companies, but definitely will work for some public companies." (Winston & Strawn LLP)
BenefitsLink Announces 'Simple Search' Engine -- Easier to Use, Better Results
Now easier and greatly improved -- our Simple Search engine quickly finds answers for you, intelligently parsing 20+ years of expertly curated links about benefit plan compliance, administration and design. Just enter a word, phrase or sentence in the box at the top right side of the menu of any web page and click the button. You'll get many more matches than before. No special syntax is needed; it basically works like Google. And you can bookmark this new page for easy access on your web browser: (BenefitsLink)
#MeToo: Sexual Harassment and Executive Compensation (PDF)
10 pages. "Whether ... 2017 was a harbinger of an enduring change in employers' attitudes towards, and approaches in addressing, allegations of sexual harassment relating to key executives remains to be seen. If it is true that #TimesUp, and in particular if customers (and members of the public more generally) favor harsher treatment of executives engaged in sexual harassment or assault, compensation committees may find value in reflecting this new attitude in the structure of their companies' executive compensation programs and agreements." (Utz & Lattan, LLC)
Moving the Bonus Plan Goalposts: Be Smart or Be Sued
"Well-drafted plans and programs include significant employer protections. But some defects can really come back to haunt employers, such as the failure to allow for 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 Court of Appeals because its bonus plan did not clearly reserve a right for Panera to unilaterally modify or terminate the plan." [Boswell v. Panera Bread Co., No. 16-3230 (8th Cir. Jan. 5, 2018)] (The Wagner Law Group)
Fears Over Downside to Clawbacks May Be Unwarranted
"[T]he great majority of firms in the S&P 1500 have on their own adopted rules that enable them to claw back compensation that executives received on the basis of misstated financial reporting.... [A recent study] suggests that companies with clawback rules generally seek to protect accounting integrity. And they do so while maintaining, and even enhancing, the advantages of performance-based CFO pay." (CFO)
White House Nominates Senate Aide as SEC Commissioner
"Elad Roisman, chief counsel to the Senate Banking Committee, has been nominated to the [SEC]. Mr. Roisman is the Republican nominee to the five-member commission to replace Michael S. Piwowar, whose term is set to end in June." (Pensions & Investments)
[Guidance Overview] SEC Provides Updated Guidance on Proxy Disclosures for Compensation Plan Proposals
"Twelve of the CDIs relate to Item 10 of Schedule 14A, which sets forth the disclosure rules when a compensation plan is submitted to shareholders for approval, but only [one] interpretation, CDI 161.03, is identified as a substantive change:... [T]he new CDI confirms that it's acceptable to provide information on individuals or groups who did not receive contingent grants or will not otherwise receive determinable awards in a narrative along with the table, rather than in the table itself." (Baker McKenzie)
Preventive Care for Executive Compensation Programs
"The compensation committee should consider conducting a review of market data on program design. Doing so would inform committee members about competitive practices and how the design of the current incentive compensation programs compares to others in the market. Where variances exist between the company's approach and majority market practice, the committee should be comfortable with discussing the reasons for such variances." (Meridian Compensation Partners, LLC)
Taxes, Culture, and Big Investors: Effects on Executive Comp
"Institutional investors seem to be influencing pay programs. How are they tipping the scales? ... How should incentive design shift during times of disruption? After all, the bull market won't last forever.... How are compensation plans shaping culture -- or is it the other way around? ... [Is] there much ado about nothing when it comes to pay ratio reporting?" (Meridian Compensation Partners, LLC)
Six CEO Pay Packages That Explain Soaring Executive Compensation
"This year, thanks to a rule in the 2010 Dodd-Frank banking regulation law, publicly traded corporations in the United States had to begin comparing the pay of their chief executives to the median compensation of other employees at the company. The results ... were predictably striking. Here are six pay packages that stand out." (The New York Times; subscription may be required)
Two Cheers for Deferred Taxation of Qualified Equity Grants
"With a qualified equity grant, an employee can elect to defer income taxes -- but not FICA -- for up to five years from when compensation would have otherwise been included in income.... So qualified equity grants are more attractive to companies expecting to be sold or go public in five years." (Miles & Stockbridge)
To Require Arbitration or Not to Require Arbitration
"One of the most common arguments in favor of arbitration to resolve disputes is that it is less expensive than litigation. Litigation is expensive and time consuming.... Another argument in favor of arbitration is that an employment, severance, or other agreement could require, or the parties could agree, that all aspects of the arbitration proceeding and results are confidential." (Winston & Strawn LLP)
Executive Compensation Planning for Owner Executives of Private Business After the Tax Cuts and Jobs Act
"Going forward, when S Corp and/or LLC owner executives are eligible for the 20% deduction, the difference in marginal rates will provide an even greater incentive to minimize wages in favor of a larger share of distributable net income. This must be weighed against other important factors including [1] optimizing the value of any qualified plan deductions and benefits, and [2] recognizing the appropriate value for services rendered by each of the owner executives who may have different levels of ownership and hold different jobs (with different values)." (Findley)
How Does Your Pay Compare to the Bottom Half of Your Company?
"This is the first year that publicly traded companies are required to tell investors how their CEO pay compares to the rest of the work force with ... the CEO pay ratio. Some companies braced for backlash as they revealed headline-grabbing numbers: Toy maker Mattel Inc. paid its CEO 4,987 times the median of all pay packages in the company.... [T]his is the first time people can see how pay disparity looks inside an individual company. More importantly, employees can now see for the first time how close their pay is to the bottom half of their own organization." (WCPO)
Financial Stability Board Consults on Compensation Data Reporting to Address Misconduct Risk
"As part of its 2015 workplan to reduce misconduct risk in financial institutions, the Financial Stability Board ... published a public consultation on [May 7] on recommendations for consistent national reporting of data on the use of compensation tools to address misconduct risk. The recommendations are intended to enhance the capacity of financial supervisory authorities to monitor the effectiveness of compensation tools and other mechanisms in promoting good conduct." (Morgan Lewis)
[Guidance Overview] SEC Issues FAQs on Compensation Plan Proposals Included in Proxy Statements
"The SEC has issued a series of frequently asked questions, ... referred to as Compliance and Disclosures Interpretations ... on proxy statements and proxy solicitations. In general the C&DIs replace previously issued telephone interpretations ... [S]ome of the more interesting C&DIs address Item 10 of Schedule 14A which sets forth disclosure requirements when compensation plans are submitted for shareholder approval." (
2018 Trends and Developments in Executive Compensation
"Of CEO Pay Ratio disclosures among respondents, roughly 50% of the ratios fell at or below 100:1 ... One-half of respondents reported compensation of the 'Median' employee between $25,000 and $75,000, with an overall median of $65,000.... [A] majority of survey respondents (54%) reported that 2018 target long-term incentive grant values were greater than 2017 values." (Meridian Compensation Partners, LLC)
[Guidance Overview] New Excise Tax on Excess Compensation Paid by Tax-Exempt Employers
"The new excise tax is effective for tax years beginning after 2017. There is no grandfather or transition rule for existing arrangements, such as Section 457(f) retirement arrangements." (Fox Rothschild LLP)
How Are Companies Faring in the Current Pay-for-Performance Environment?
"[S]alary and target annual incentives remained fairly consistent with ... 2016, increasing 2% and 3% respectively. Pay increases are primarily driven by long-term incentives (LTI), which align with the positive TSR statistics observed in 2017 ... Target LTI values, which represent the grant value of stock options, time-vested restricted stock and the target value of long-term performance awards, increased by approximately 7%, compared to 5% in 2016." (Willis Towers Watson)
Initial Readings of the CEO Pay Ratio
"Companies with large numbers of part-time or seasonal employees are reporting the highest CEO pay ratios, especially if those workers are located in developing countries.... Among sectors, there appears to be a strong relationship between lower median employee pay and a higher CEO pay ratio." (Farient Advisors)
Third Circuit Dismisses Employees' Class Action Suit and Finds Chemours' Severance Plan Is Not Subject to ERISA
"The court found that the ancillary rights granted or obligations imposed upon the VSP participants (a knowledge transfer requirement, restrictive covenant, non-disparagement provision, and right to reapply) did not make the VSP an ERISA plan because there was a time-limited obligation, it did not implicate ongoing administration, and it required passive and ministerial observation." [Girardot v. The Chemours Company, No. 17-1894 (3d Cir. Apr. 30, 2018)] (Morris James LLP, via JDSupra)
IPOs and Spin-Offs: Take a Fresh Look at Purpose and Executive Compensation
"[T]he role of [executive compensation] in an IPO is to realign the interests of management from the purpose of one set of owners to that of another, as expressed through the firm's mission, strategy, and objectives. This shift in strategy and mission -- and how that is reflected in executive pay -- is as important to articulate and get right as the long checklist of legal and regulatory steps that must be taken for a successful IPO." (Willis Towers Watson)
The Next Critical Action Item After Filing Your Proxy Statement
"Compensation Committees and the appropriate members of the Company's legal, executive compensation, tax, and/or HR functions should quickly prepare to shift their focus to action items relating to new world of Code Section 162(m) -- without a performance-based compensation exception.... [F]or many companies, the impact of losing the ability to deduct compensation amounts over $1 million per year per executive will be significant." (Winston & Strawn LLP)
Delaware Court of Chancery Excuses Pre-Suit Demand for Derivative Complaint Alleging Wasteful Compensation
"The Delaware Court of Chancery held ... that a stockholder plaintiff was excused from making a pre-suit demand on the board to pursue his claims that certain compensation payments made to the executive chairman were excessive, because the allegations exposed the board to liability for waste of corporate assets." [Feuer v. Redstone, No. 12575-CB (Del. Ch. Apr. 19, 2018)] (Thomson Reuters Practical Law)
[Guidance Overview] 2018 Update for Internal Revenue Code Section 162(m) Changes
"Be careful to examine shareholder-approval issues before amending a plan that previously received such approval.... To preserve corporate deductions, consider increased use of deferred compensation and restricted stock (with longer vesting schedules), and less use of stock options. Likewise, draft new severance plans and employment agreements to provide for installment payouts, as well as to allow severance bonus payouts at target[.]" (The Wagner Law Group)
Executive Compensation as Corporate Waste? Delaware Court Allows a Lawsuit to Continue
"Two full pages of the opinion are devoted to listing facts and information 'demonstrating that it should have been abundantly clear to the members of the Board ... that far from being 'actively engaged' in CBS's affairs, Redstone was providing no meaningful services to the Company beginning at some point in the latter part of 2014 or in 2015. During and after that period, CBS paid Mr. Redstone more than $13 million, most of it in performance bonuses." [Feuer v. Redstone, No. 12575-CB (Del. Ch. Apr. 19, 2018)] (Winston & Strawn LLP)
Just Because Your Company Is Privately Held Doesn't Mean the SEC Isn't Watching
"Private companies should [1] develop written policies and procedures dealing with equity-based compensation to ensure their compliance with Rule 701 limits.... [2] develop written policies and procedures that address how financial disclosures are to be disseminated so as to safeguard the confidentiality of the financial information while still complying with Rule 701.... [3] put into place processes and procedures that ensure as appropriate that timely reporting and disclosures are provided to employees before the Rule 701 $5M threshold is triggered in any 12-month period." (Holifield Janich Rachal & Ferrera, PLLC)
New Target of 'Shareholder' Strike Suit Litigation
"Now that the Tax Cuts and Jobs Act of 2017 has eliminated the performance-based compensation exception to Code Section 162(m), a plaintiffs law firm has announced that it was shocked, shocked by the fact that a company was using a 162(m) umbrella plan to qualify its compensation as performance-based." (Winston & Strawn LLP)
Advantages to Pre-Tax Deferral of Income in an Uncertain Tax Environment: 2018 Updates (PDF)
14 pages. "This article explains how you should consider recent and future tax rate changes when analyzing whether to participate in your company's nonqualified deferred compensation (NQDC) plan.... The only scenarios favoring the personal investment account involve high wage earners willing to settle for a meager 3% pre-tax return and invest their income over a short 10-year period. In all other scenarios, an NQDC account provided an advantage (in terms of the total amount accumulated after taxes are paid) ranging from a low of 1.75% to 47.75%." (Fulcrum Partners LLC)
Embracing the Quasi-Clawback
"In light of the difficulty of recouping compensation, companies should consider what ... the quasi-clawback, or the forfeiture of amounts that have not yet been earned, or have been earned but not yet paid....[W]ays in which companies can implement quasi-clawback features in their compensation programs: [1] Forfeiture of unvested incentive based compensation ... [2] Deferred payment of earned incentive-based compensation.... [3] Forfeiture of nonqualified deferred compensation." (Shearman & Sterling LLP)
Stock Awards Behind Most CEO Pay Hikes
"More CEOs at large money managers or banks with large asset management units received total compensation increases in 2017 compared with the previous year, and most increases came via stock awards -- a practice that sources said would continue as managers tie chief executive pay to long-term performance." (Pensions & Investments)
California (Re)Introduces Pay Ratio Corporate Tax Bill with Unique Calculation
"California Senate Bill 1398, introduced by Democrat State Senator Nancy Skinner, would increase corporate taxes for public companies from the base rate of 8.84 percent to a high of 13 percent for companies with pay ratios exceeding 300. Significantly, the tax rate would increase by an additional 50 percent if a company reduces its U.S. full-time workforce by 10 percent or more during the [previous tax] year." (HR Policy Association)
IRS Filing Deadlines and Stock Compensation Planning for 2018
"In any tax season, the recognition of income from stock compensation or an employee stock purchase plan can complicate your return. Examples include income from an NQSO exercise, an ISO or ESPP disqualifying disposition, or the vesting of restricted stock.... [T]his tax season has the potential to be more confusing than most if you sold any stock last year. Issues are especially likely to arise with the cost basis as reported on Form 1099-B and with the tax-return reporting on Form 8949 and Schedule D." (
[Guidance Overview] Tax-Exempt Executive Compensation Under Fire
"To which tax-exempt entities do the new taxes apply? ... Who is a covered employee? ... What is an 'Excess Parachute Payment' for purposes of the Parachute Tax? ... What is 'Remuneration' for purposes of the Excess Compensation Tax? ... Do the Excess Compensation Tax and the Parachute Tax apply to individuals providing services through another entity, a partnership, or in a capacity other than that of an employee? ... What should tax-exempt entities be doing at this time, and what, if any, planning opportunities are there to address these new taxes?" (Michael Best)
Credit Karma Settles with SEC over Alleged Stock Option Disclosure Failures
"The [SEC] recently instituted a cease-and-desist proceeding against Credit Karma, Inc.... for failing to provide adequate disclosure to its stock option holders pursuant to SEC Rule 701 because Credit Karma did not comply with relevant disclosure requirements for offerings in excess of $5 million.... Credit Karma agreed to a settlement with the SEC and paid a civil penalty of $160,000 -- well above what the disclosures would have cost.... Rule 701 is a safe harbor exemption that excuses certain employee benefit plans, including stock incentive plans, from registering equity offerings and sales under the Securities Act." (DLA Piper)
[Opinion] Navigating the Pay-Ratio Quagmire
"While pay-ratio information is supposed to be useful to investors, attention needs to be paid to the anticipated reactions to these disclosures by the media, current and potential employees and unions. Anyone who is a shareholder will have access to this information, including employees, who may own stock either directly or through a 401(k) plan. Religious and other groups who own just a single share will also have access to it. And for larger companies, it would be surprising if the media did not focus on 'outliers.' " (Human Resource Executive)
Should Compensation Committees Seek CEO Input When Deciding CEO Pay?
"[T]he CEO's perspective can be useful ... The CEO should not be present when the compensation committee is making decisions about his or her compensation.... Prior to receiving any input from the CEO, the compensation committee chair, board chair, or lead independent director should set clear expectations about the process and that the committee or board will make the final pay decisions.... Directors should get the CEO's view of his or her individual and company performance." (Meridian Compensation Partners, LLC)
Managing an NQDC Plan Investment Menu
"Unlike a qualified defined contribution plan, in which plan assets are segregated from the employer's general assets in a trust or custodial account, the compensation deferred into an NQDC plan remains commingled with the employer's general assets and the returns are notional. This arrangement is significant because the plan sponsor bears the responsibility for funding the notional returns generated by the investment menu." (Callan)
Employee Stock Purchase Plans: The Biggest Tax-Return Mistakes to Avoid
"[1] Not filing Form 8949 after an immediate sale of ESPP shares at purchase.... [2] Paying tax on the discount too early.... [3] Directly using what appears as the cost basis on your Form 1099-B.... [4] Paying the wrong tax on the discount.... [5] Using the wrong price when there is no lookback." (
[Guidance Overview] Expanded Disability Claims Procedure Rules Become Effective in Three Days
"Plan sponsors need to review their plans to determine whether such plans provide disability benefits and, if so, whether the rule applies. This review should encompass not only short- and long-term disability plans, but also ERISA-governed retirement, severance and 'top hat' plans that provide disability benefits.... [A]ppropriate steps should be taken to amend plan documents, prepare necessary participant communications and confirm proper administration of any disability claims filed on or after April 1." (McGuireWoods)
Big Question Under CEO Pay Ratio Rule: Who Is Your Median Employee?
"Who is the worker at the midpoint of the employee population in terms of compensation? Rules and guidance from the [SEC] allow some flexibility with this determination. As a result, companies aren't just answering one big question when identifying that special median somebody, but instead addressing a number of smaller questions along the way." (Bloomberg BNA)
Common U.S. Securities Problems with Canadian Stock-Based Compensation Plans
"For companies that are cross-listed and file reports with the [SEC], the intention is typically to register the underlying securities by filing a Form S-8 with the SEC. For companies that do not file SEC reports -- whether publicly traded in Canada or privately held -- the intention is typically to rely on the exemption provided by Rule 701 under the Securities Act of 1933 and exemptions under the securities laws of the states in which awards will be granted." (Dorsey)
Five Primary Components of an Effective Long Term Incentive Plan
"[1] Determine business drivers that trigger awards.... [2] Determine what level of executive should be eligible to participate.... [3] Determine share rates.... [4] Allocation of award among eligible group.... [5] Award distribution." (Fulcrum Partners LLC)
Comparing CEO Pay Ratios: What the First 200 Filings Show
"[Put] disclosures in context so that differences are framed by labor demographics, company size, CEO compensation and calculation methodology. This may be less important for companies with ratios that are comparable with their peers, but when a significant disparity exists, it is time to focus on the reasons why ... Median pay differences will fluctuate based on company labor models ... Variations in CEO compensation due to special circumstances and transitions ... Flexibility in methodology predictably yielded a wide variety of approaches." (Willis Towers Watson)
Companies Show No Love for Hard-Won Exemption to Pay Ratio Rule
"Business advocates pressed the SEC as it drafted the rule to include a way for companies to avert potential privacy violations when collecting information on non-U.S. workers.... But the extra legwork and added disclosure required has turned off most companies to its use." (Bloomberg BNA)
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