News Archive

"Beginning June 30, 2027, all noncompetition covenants are void and unenforceable unless they fall under an exception to the law.... The statute also takes an indirect swipe at training repayment agreement provisions (TRAPs), stay or pay provisions, and incentive clawbacks and forfeitures."  MORE >>

"Last month, the IRS released GLAM 2026-001 clarifying that applicable tax-exempt organizations (ATEOs) cannot escape the IRC Section 4960 excise tax on excess executive compensation simply because a covered health insurance provider (CHIP) is part of their affiliated group.... The GLAM also explicitly repudiates Chief Counsel Advice 201752008 (2017), warning that reliance on it does not qualify as a 'reasonable, good faith interpretation' of IRC Section 4960 -- in part because that CCA was issued before IRC Section 4960 was enacted. "  MORE >>

"This article provides a practical framework for distressed companies navigating top-hat plans, covering: [1] What top-hat plans are and why they are uniquely vulnerable in distressed companies. [2] Key bankruptcy risks: preferences, fraudulent transfers, and avoidance actions. [3] Pre-filing preparation strategies that work and pitfalls to avoid. [4] Section 409A compliance essentials for distressed companies. [5] Post-petition retention tools: Key Employee Incentive Plans (KEIPs) vs. Key Employee Retention Plans (KERPs)."  MORE >>

"An excess benefit transaction occurs when an applicable tax-exempt organization [ATEO] provides a disqualified person with compensation that exceeds what the IRS views as 'reasonable' compensation.... To avoid triggering potential sanctions, ATEOs must ensure that compensation arrangements with any disqualified person meet IRS requirements for 'reasonable compensation.' "  MORE >>

"A loan regime split-dollar life insurance arrangement can be an important option to provide retirement benefits to nonprofit executives ... Nonprofit organizations face unique challenges when designing competitive compensation packages for executives.... These rules create significant and immediate tax burdens on both the executive and the organization for retirement benefits that are intended to be paid out over multiple years."  MORE >>

"Apple Inc. has dropped an 'ESG modifier' from its 2025 pay packages for top executives, which had allowed the board to adjust annual bonuses based on performance on environmental measures.... The share of S&P 500 companies tying executive compensation to environmental metrics fell to 46.7% in 2025, down from a peak of 52.6% two years earlier[.]"  MORE >>

"Executive benefits are an increasingly common way for employers to attract and retain top talent for key positions in the organization. Although nondiscrimination rules often present barriers to implementing certain forms of executive arrangements, there are almost always workarounds, alternatives, or taxable (with a gross-up if desired) approaches that can accomplish many of the same goals."  MORE >>

"In recent remarks at the 53rd Annual Securities Regulation Institute, SEC Commissioner Mark T. Uyeda signaled a potential shift away from disclosure mandates perceived as costly or socially prescriptive, toward a regime more closely tied to investor relevance and statutory requirements."  MORE >>

137 pages. "[This Handbook] is intended to help compensation committee members understand and comply with the duties imposed upon them.... [It describes] in some detail the concepts underlying a variety of areas within the bailiwick of compensation committees ... [and discusses] developments over recent years to executive and director compensation practices and related trends, particularly regarding the SEC's newly announced consideration of changes to executive compensation disclosure requirements and continued developments in laws relating to executive and employee noncompetition arrangement."  MORE >>

"ISS's pay-for-performance quantitative analysis to assess pay for performance alignment will be extended to a five-year look back period from a three-year period for certain components of the analysis.... ISS announced that it would be taking a more favorable view of time-based equity awards with extended time horizons with respect to its pay-for-performance analysis.... Glass Lewis updated its pay-for-performance methodology, transitioning from a single letter grade of 'A' through 'F', to a scorecard-based approach that consists of up to six tests. "  MORE >>

"[EO 14372] directs the Secretary to ensure contracts and contract renewals executed after March 8, 2026, contain a new clause aligned with the EO. Contractors subject to the new clause must have executive incentive compensation plans that reward on time deliveries and investments in production capacity rather than achievement of short-term financial metrics. If the DoW determines ... that a contractor does not sufficiently prioritize, invest in or establish acceptable production rates, contractor compensation and executive incentive plans will be scrutinized."  MORE >>

"[This article summarizes] the rules related to the year-end reporting requirements for ISO exercises on Form 3921 and ESPP transfers on Form 3922, and the penalties that could apply if a corporation fails to follow these rules."  MORE >>

"Gen Z leaders will expect not only competitive compensation but also transparent, technology-enabled and values-driven pay programs and practices. Their fluency and comfort with real-time data and artificial intelligence could push innovative compensation designs, dynamic goal setting and risk-adjusted incentives. More importantly, Gen Z's desire for social impact may bring purpose-based performance to the center of executive pay discussions."  MORE >>

"[1] Understand the vesting schedule of your restricted stock units (RSUs).... [2] Know how your company will withhold the taxes on your RSU shares.... [3] Have a plan for the RSU shares you will receive at vesting."  MORE >>

"[1] Last chance to correct certain Section 409A document failures discovered in 2025.... [2] Nonqualified deferred compensation deferral elections should be made on or before December 31, 2025.... [3] Take certain action to address impact of Tax Cuts and Jobs Act on Section 162(m) of the Code.... [4] Review whether equity-based compensation plans have sufficient shares remaining for 2026 awards.... [5] Review director pay practices and consider separate annual limits on director equity awards.... [6] Review ISS 2026 benchmark policy voting policies for executive compensation matters:.... [7] Section 6039 of the Code information statements due by February 2, 2026.... [8] Continue to consider clawback disclosure issues.... [9] Consider electronic filings for future Section 83(b) elections."  MORE >>

"[The] Internal Revenue Code requires that separate information returns be furnished to most U.S. taxpayers who exercised ISOs during 2025 or who transferred shares during 2025 that were acquired under an ESPP.... The deadline for furnishing Forms 3921 and 3922 to optionees and transferors is February 2, 2026. The deadline for filing Forms 3921 and 3922 with the IRS is March 2, 2026, if you physically mail the form, or March 31, 2026, if you send the form electronically."  MORE >>

"ISS and Glass Lewis policy changes applicable to the U.S.... [1] Pay-for-Performance -- ISS & Glass Lewis; [2] Responsiveness to Low Say-on-Pay Votes -- ISS; [3] High Non-Employee Director Pay -- ISS; [4] Equity Plan Proposals -- ISS; [5] Pay-for-Performance -- ISS & Glass Lewis (New)."  MORE >>

"[1] Monitor ongoing developments on executive compensation disclosure rules; [2] Review executive security practices and related disclosure considerations; [3] Review proxy disclosures around non-GAAP measures in incentive plans; [4] Review 2025 say-on-pay voting trends ... [5] Stay current on proxy advisor firm developments ... [6] Ensure operational readiness for potential clawbacks; [7] Evaluate CEO succession planning and related disclosures; [8] Prepare for expansion of Section 162(m) covered employees in 2027 and the new aggregation rule; and [9] Monitor noncompete developments."  MORE >>

"There may be a convergence of at least four factors that could bode poorly for proxy-advisory firms. First, .. there was the Trump reelection. Then, there is the ramping up of controversy and criticism ... of proxy advisors firms that have made their way towards matters relating to diversity, equity and inclusion (DEI) and environmental, social and governance (ESG),  ... [T]hese federal factors are evolving against the backdrop of the extremely high-profile approval of the Musk compensation package over the clear objection and no-vote recommendation of the principal proxy-advisory firms. And now, we have the Executive Order taking direct aim at proxy advisors."  MORE >>

"In the fact sheet accompanying the order, the White House accused two major proxy advisory firms, Institutional Shareholder Services Inc. and Glass, Lewis & Co.... of using their market dominance to push 'radical leftist policies' on U.S. corporations.... The order further tasked the [DOL] with strengthening fiduciary standards under [ERISA], which are already considered among the strictest under U.S. law, to ensure that pension fund managers and proxy advisers act solely in the financial interests of American workers and retirees[.]"  MORE >>

"[T]wo foreign-owned proxy advisors, Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, play a significant role in shaping the policies and priorities of America's largest companies through the shareholder voting process.... The Chairman of the [SEC] shall review all rules, regulations, guidance, bulletins, and memoranda relating to proxy advisors.... The Secretary of Labor shall, consistent with the APA, take steps to revise all regulations and guidance regarding the fiduciary status of individuals who manage, or, like proxy advisors, advise those who manage, the rights appurtenant to shares held by plans covered under [ERISA], including proxy votes and corporate engagement, consistent with the policy of this order.... The Secretary of Labor shall take all appropriate action to strengthen the fiduciary standards of pension and retirement plans covered under ERISA. Such action shall include assessing whether proxy advisors act solely in the financial interests of plan participants and the extent to which any of their practices undermine the pecuniary value of the assets of ERISA plans."  MORE >>

"We look forward to working with the administration on reforms that strengthen the proxy voting system to better serve retail investors and support the health of US capital markets. A fair and efficient proxy process empowers millions of Americans to shape the long-term success of their investments and the broader economy."  MORE >>

"Institutional Shareholder Services (ISS) has released its benchmark voting policy updates for 2026, with notable shifts in board accountability for capital structures and responsiveness, executive compensation assessments, evaluation of equity plans, and ISS's approach to key environmental and social shareholder proposal topics. The updated policies will generally apply to shareholder meetings taking place after February 1, 2026."  MORE >>

"As the 2026 proxy season approaches, public companies and their boards are navigating a rapidly evolving executive compensation landscape.... This alert outlines key considerations for public companies and their compensation committees as they prepare for the 2026 proxy season and related compensation decisions"  MORE >>

"Prevalent among public and private organizations alike, [annual incentive plans (AIPs)] often are reserved for senior professional and management positions. However, in [one] study, 52% of ESOPs extend AIP eligibility to all employees. This compares to only about one-third of private and public companies ... The prevalence of LTIs among ESOPs are more aligned with that of private companies at approximately 80%, compared to 99% among public companies."  MORE >>