Tag Archives: US

SEC proposes new pay-for-performance rules

In its most recent action dealing with the controversial topic of executive pay, on Wednesday, April 29, 2015, the Securities and Exchange Commission (SEC) voted 3 – 2 to approve proposed rules regarding pay-for-performance in the wake of the Dodd-Frank Act. The proposed rule is intended to require companies to show, typically in their annual … Continue Reading

EEOC issues new Regulations on Wellness Plans

The U.S. Equal Employment Opportunity Commission just released proposed regulations related to wellness plans, finally lifting the veil of secrecy surrounding its actions.  The EEOC regulations apply to wellness plans that include disability related inquiries or “medical exams” The EEOC’s regulations are designed to allow employers to continue to provide financial incentives to employees, up to … Continue Reading

Increased support for executive compensation tax reform on Capitol Hill

Most of us believe that comprehensive tax reform for 2015 is already dead despite Ways and Means Chairman Ryan’s (R-WI) oft-repeated statements to the contrary. But perhaps new life may be breathed into executive compensation reforms.  On the heels of a recent Senate Finance Committee hearing dealing with tax fairness, the committee’s ranking Democrat, Sen. … Continue Reading

Executive compensation disclosures a wasted effort?

Are the ever-increasing US public company disclosures, particularly those dealing with executive compensation, even helpful to the investing public? A recent study commissioned by the Stanford University Rock Center for Corporate Governance, RR Donnelley and Equilar suggests the answer may be no, even among sophisticated institutional investors. The 2015 Investor Survey notes that only 38% of … Continue Reading

Institutional Shareholder Services Provides New Proxy Guidelines

The Institutional Shareholder Services (“ISS”) released updates to its guidelines that govern its shareholder recommendations on a number of corporate governance matters. Significantly, ISS has adopted a new scorecard for evaluating whether ISS will recommend approving a company’s compensation plan. The Equity Plan Scorecard, or EPSC, considers a range of factors that fall into three … Continue Reading

Glass Lewis Provides New Proxy Guidelines for Shareholders of Public Companies

Glass Lewis recently released updates to its policies that govern recommendations to shareholders on a number of corporate governance matters. As relates specifically to compensation, such updates include: In assessing pay-for-performance, compensation plans that otherwise receive an unsatisfactory rating from Glass Lewis’ qualitative evaluation model may nevertheless receive a recommendation of approval from Glass Lewis … Continue Reading

Retirement Issues and the 2014 Congressional Election: The More Things Change, the More They Stay the Same

While the scope of the Republican Party’s victories in the U.S. mid-term elections may have been surprising (at least to some), a leadership shake-up in the congressional committees with jurisdiction over the country’s public and private, employer-based retirement system was a foregone conclusion.  As further described in our 2014-mid-term Congressional elections analysis a number of key Congressional … Continue Reading

Major US pension buyouts announced

It looks like both Motorola and Bristol-Myers Squibb (BMS) will be transferring significant portions of their defined benefit pension plans liability to Prudential Insurance. Both buyouts were announced this week – and are expected to be completed in December. The Motorola plan buyout will be the third largest in the United States (following the 2012 … Continue Reading

ISS launches new equity plan data verification portal

Earlier this year, Institutional Shareholder Services Inc. released its Governance QuickScore 2.0 data verification portal (see our March Post). It has recently announced the launch of another portal giving all U.S. public companies that have an equity-based compensation plan listed on their proxy ballot for shareholder approval the opportunity to verify the data regarding such … Continue Reading

New SEC guidance on proxy advisory firms

When significant decisions for public corporations are up for shareholder vote, institutional investors and shareholders or their registered investment advisors (meaning an individual or firm registered with the Securities and Exchange Commission (“SEC”) that is in the business of giving advice about securities in exchange for compensation (“RIAs”)) often rely on the voting recommendations of … Continue Reading

IRS confirms no acceleration of US tax for some stock plans

The IRS has confirmed that stock-based plans of non-U.S. employers under which options and stock appreciation rights are settled in stock do not result in acceleration of income for US tax purposes.  However,  the ruling also confirmed that stock appreciation rights that may be settled in cash can result in acceleration of income for employees … Continue Reading

Additional Thoughts About the U.S. Supreme Court’s Hobby Lobby Decision

For employers, the Hobby Lobby decision of the U.S. Supreme Court makes no attempt to define the scope and meaning of the term “closely held” corporation.  The majority opinion stated that “the cases before us are closely held corporations, owned and controlled by members of a single family”.  Is this ruling supposed to be limited … Continue Reading

The Silver Lining in Fifth Third Bancorp v. Dudenhoeffer?

The U.S. Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer eliminates an ESOP fiduciary’s presumption of prudence in relation to the holding employer securities.  Many have viewed this decision with horror.  However, my perspective is that the “revised” pleading standards articulated by the court will actually be a significant silver lining for ESOP fiduciaries. … Continue Reading

401(k) plans – new rule on fiduciaries delayed (again)

The U.S. Department of Labor’s revised proposed rule for defining a fiduciary has been delayed … again. Most recently expected in August, the Labor Department is now predicting January 2015. And, the rule has a new name: The Conflict of Interest Rule for Investment Advice. As a refresher, the proposed rule would broaden the definition … Continue Reading

A Take-Away from the Quality Stores Decision

The U.S. Supreme Court’s recent decision in United States v. Quality Stores, Inc., No. 12-1408.,188 L. Ed. 2d 413, has broader implications for employers than its legal holding. On its face, the holding is that supplemental unemployment compensation benefits paid to terminated employees after a reduction in force or closing of an operation are subject … Continue Reading

Shareholder Activism in the US

Earlier this month, Squire Sanders hosted a roundtable discussion, “The Activist Shareholder,” during its 2014 Roundtable for General Counsel in the Chemical and Performance Materials Industries, a two-day executive event held in Washington, DC. The panel addressed the significant increase in shareholder activism in recent years, and among other topics, it addressed the need for … Continue Reading

US Companies Get Ready to React: ISS Launches QuickScore 2.0

On February 18, 2014, Institutional Shareholder Services (ISS) launched an updated and enhanced version of its governance and risk assessment tool for Russell 3000 companies – “ISS Governance QuickScore 2.0” (QS 2.0). Some of its new features include a new monitoring system that will be event-driven, whereby ISS will track certain regulatory filings (eg the … Continue Reading

Amending Clawback Policies Ahead of SEC Rulemaking – Are Companies Tackling the Issue?

Ahead of SEC Rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the topic of amending clawback policies is a sensitive one for companies and boards. At some point we know that rules will be enacted, but companies and boards struggle with what (if anything) to do in advance. The clawback aspects … Continue Reading

Holiday gift from NASDAQ

NASDAQ has filed amendments to its rules on compensation committee composition. In a welcome move, the revised rules are closer to the more flexible rules adopted by the New York Stock Exchange. The changes come into effect immediately so NASDAQ companies that have already changed their compensation committee charter to comply with the changes NASDAQ … Continue Reading

Switzerland’s 1:12 Initiative Failed but the Debate for Pay Equality Continues

On November 24, 2013, Swiss voters soundly voted down (65.3% to 34.7%), a proposal to limit the pay of companies’ highest paid managers to 12x that of their lowest paid rank-and-file workers, known as the “1:12 Initiative”. The 1:12 Initiative was raised by Switzerland’s Young Socialists, who succeeded in collecting 100,000 signatures to put the 1:12 … Continue Reading

Oracle’s Larry Ellison and Where is Say-on-Pay Headed in 2014?

On October 31, 2013, shareholders of Oracle Corp. voted “no” to CEO and founder Larry Ellison’s pay package worth $78.4 million (which is actually down 18 percent from the $96.2 million package he received a year earlier for which he also received a “no” vote by Oracle shareholders) (see Oracle Form 8-K filing).  Approximately 56.3 percent of … Continue Reading