News Archive

"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]

MORE >>

"As investor expectations shift, regulatory pressure mounts, and business models evolve, compensation committees are moving away from short-term incentive plans that rely solely on a single financial performance measure.... [This article] outlines how public company boards and compensation committees are responding by adopting annual bonus structures that incorporate multiple performance factors, strategic goals, and clearly governed discretion frameworks."  MORE >>

"Each online filing currently accepts a maximum of 999,999 securities per submission. Very large founder grants and early-exercise option exercises can exceed this.... The online form only allows two decimal places for the fair market value per security and the amount paid per security. This could be a problem for many typical startup early common stock prices (e.g., US$0.0001 per share) and a source of rounding noise in the form's auto-calculated totals."  MORE >>

"To stay competitive, companies are exploring new strategies that reflect the realities of today's market. These approaches are still evolving but signal where compensation is heading:[1] Performance-based equity ... [2] Founder refresh ... [3] Rising AI pay."  MORE >>

"A well-structured BOLI program provides banks with a tax-efficient asset that can help offset employee benefit costs while improving long-term financial stability and helping to attract and retain key employees. In fact, now may be one of the best times in the past few years for banks to consider BOLI due to the current higher-interest-rate environment."  MORE >>

BenefitsLink note:  DOL initially released this Regulatory Agenda in error on Aug. 15, 2025.  See BenefitsLink summary of final Agenda publicly released on Sep. 4, 2025.  MORE >>

"In light of the IRS' proposed regulations and the FTC's pending noncompete ban, plan sponsors ... face increased compliance risk. These employers must closely assess whether noncompete provisions used to structure [substantial risks of forfeiture (SRFs)] remain enforceable under state law and whether they satisfy the IRS' standard for deferral eligibility."  MORE >>

"Say-on-pay support stays steady ... DEI metrics disappearing from incentive plans ... Perks under pressure ... Reduced visibility into institutional voting behavior and rationales."  MORE >>

"For nonprofits, the 21% excise tax on executive compensation over $1 million has been dramatically expanded from applying to only the top 5 highest-paid employees to all current or former employees earning over $1 million. For public companies, the expansion of Section 162(m) deduction limitations creates new incentives to adopt nonqualified deferred compensation (NQDC) plans as tax-efficient compensation strategies."  MORE >>

"Although some of the OBBB's benefits provisions simply make permanent existing temporary suspensions in the Code, others will provide opportunities for enhancement or expansion of employee benefit programs.... Conversely, the OBBB also presents some challenges for employers, who must now revise how they monitor certain executive compensation amounts, and make operational changes to their payroll administration systems for certain wages such as overtime pay."  MORE >>

"The 'One Big Beautiful Bill Act of 2025' (OBBBA) made permanent many of the tax provisions in the Tax Cuts & Jobs Act of 2017 (TCJA) that relate to stock comp planning, with a few changes.... This quiz is also a course of study. The answer key links to content on the topic for follow-up reading."  MORE >>