News Archive

"[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 >>

"In today's dynamic and often unpredictable business environment, companies sometimes face circumstances that force them to reconsider their existing incentive plans midstream. Unpredictable conditions -- global crises, economic downturns, unforeseen industry disruptions, or governmental policy changes -- pose significant challenges to maintaining standard performance metrics and reward structures. Adjusting incentive plans under such circumstances requires a careful approach that safeguards the credibility of compensation plans, ensures transparency, and upholds governance standards."  MORE >>

"When you are evaluating whether to exercise stock options or sell shares from vested restricted stock/RSUs or an ESPP, you want to consider the thresholds that may trigger higher tax rates for you either this year or next. Assess whether you should defer income into next year or accelerate income into this year. Project your income from equity awards to see whether it will trigger the additional Medicare taxes on high incomes this year or next year."  MORE >>

"[A]nalysis [of] 2024 disclosures (reflecting the 2023 financial year) from 871 companies across Europe and North America ... suggest[s] that ESG metric payouts are broadly in line with those of financial metrics, suggesting a comparable level of goal-setting rigor. However, a more nuanced picture emerges when we look at different types of ESG metrics in more detail."  MORE >>

"Three former Morgan Stanley financial advisers ... [allege] the agency acted unlawfully when it issued an advisory opinion siding with Morgan Stanley about whether certain deferred compensation plans are protected under [ERISA]. The lawsuit ... claims the DOL's [Advisory Opinion 2025-03A] violated the Administrative Procedure Act and unfairly interfered with ongoing arbitration proceedings." [Sheresky v. Chaves-DeRemer, No. 25-8935 (S.D.N.Y. complaint filed Oct. 28, 2025)]  MORE >>

"No MLB team has used deferred compensation contracts more than the Dodgers, with the next closest team being over $800 million behind. In recent years, the Dodgers have garnered the most headlines for this type of compensation structure. But nothing the Dodgers are doing is improper or unusual -- in fact, it is regularly used in the corporate employment world. And it has a history in the MLB."  MORE >>

"Should incentive plans directly include a cybersecurity metric for top company officers, or is the impact on 'earnings' sufficient to reflect the occurrence? How should boards and board committees consider the impact of cyber attacks on incentive plan outcomes?"  MORE >>

"When companies were asked if they were considering adding benefits within the next 24 months, 20% answered yes. Of that total, 27% were considering adding financial counseling benefits, 15% personal security, and 14% an executive physical exam.... [F]inancial counseling was the most popular benefit, with 72% of companies offering it to their CEOs and 76% to their senior executives."  MORE >>

"Executive benefits are receiving a renewed focus from compensation and benefits professionals.... here was a clear increase in the number of companies offering personal, cyber, and home security benefits for CEOs.... 20% of [the] survey respondents are considering adding new benefits in the next two years. The prevalence of cash allowances remains low due to the inefficiencies they can create."  MORE >>

"While it's a good idea to have a plan for any equity awards, tax planning is especially crucial for incentive stock options (ISOs). The special tax treatment that ISOs offer under the tax code is offset by the tradeoff of risk and more complicated taxation."  MORE >>

"[In] the Department's view, the mere fact that the terms of the program contemplate limited situations where an award could be paid after termination of employment does not implicate a deferral of income of the kind contemplated by ERISA section 3(2)(A). Thus, the Department has no reason to believe that the deferred incentive compensation program is an employee benefit pension plan under ERISA section 3(2)(A) as a result of such surrounding circumstances."  MORE >>

"The FTC Joint Labor Task Force on competition in the labor market is officially active ... [S]teps you can take now to ensure you stay compliant: [1] Don't abandon your restrictive covenants completely.... [2] Take stock of how you use noncompetes throughout the workforce.... [3] Reexamine the scope of your noncompetes.... [4] Don't forget about state law.... [5] Take advantage of other protections. "  MORE >>

"On September 4, 2025, the US Federal Trade Commission filed an enforcement action and simultaneous proposed settlement ... [T]he day after filing the enforcement action, the FTC voluntarily dismissed its appeal of the court rulings prohibiting the FTC from enforcing its Non-Compete Rule, which attempted to ban all employer-employee non-competes. The enforcement action signals continued focus on non-competes even though the ban is no longer on the table."  MORE >>

"The scope of NQDC subject to FICA taxation is broad, including voluntary deferrals of salary, restricted stock units and performance stock units with deferral features, SERPs, and certain deferred bonuses. Understanding when FICA tax applies to NQDC, and how to take advantage of FICA tax timing rules, can help employers avoid errors when administering their NQDC arrangements."  MORE >>

Published Sep. 4, 2025.  Changes from the Fall 2024 IRS Regulatory Agenda:

Added to Proposed Rule stage:

• Indian Tribal Governmental Plans [1545-BI19]
• Minimum Vesting Standards [1545-BN49]
• Electronic Furnishing of Payee Statements Regarding Digital Asset Sales by Brokers [1545-BR47]
• Modification to Section 415(c) Compensation Definition Relating to Back Pay [1545-BR49]
• Determination of Target Normal Cost and Funding Target for Single-Employer Defined Benefit Pension Plans [1545-BR50]
• Transparency in Coverage (CMS-9882) [1545-BR51]

Moved from Proposed Rule stage to Final Rule stage:

• Regulations Governing Practice Before the Internal Revenue Service [1545-BQ12]
• Automatic Enrollment Requirements under Section 414A [1545-BR08]
• SECURE 2.0 Act Updates to Catch-up Contribution Rules Under Section 414(v) [1545-BR11]

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