As a follow-up to my post entitled “Thoughts When Linking Public Company Executive Pay to D&I Initiatives,” I think it is important to share, at least at a high level, the legal framework for diversity, equity and inclusion programs (i.e., it is important to successfully navigate employment laws prior to the Board taking
Compensation Committee
Thoughts When Linking Public Company Executive Pay to D&I Initiatives
This Post will begin a series of blog entries focused on the topic of linking executive pay to a publicly-traded issuer’s diversity and inclusion (“D&I“) initiatives. As background, there has been a recent push to hold executives accountable for the effectiveness of an issuer’s D&I initiatives by linking their executive pay to the success of such initiatives. Pretty straight forward (i.e., the success of the D&I initiative becomes one of the metrics in the issuer’s performance-based compensation strategy).
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Interplay Between SEC Human Capital Rule, Compensation, D&I Initiatives and Proxy Disclosure
On Wednesday, September 30, 2020, we will be hosting a webinar entitled “The SEC’s New Human Capital Rule, Workplace Diversity and Compensation Design: Year-End Disclosures and the Board Agenda 2020”. The purpose of this webinar is to cover the SEC’s new Human Capital rule and how such disclosure will interplay and impact any diversity…
SEC Amends Rules for Proxy Advisory Firms
On July 22, 2020, the Securities and Exchange Commission adopted final rules and supplemented interpretative guidance that modify the proxy rules as applied to proxy advisory firms and clarify the fiduciary duties of investment advisers when voting proxies. One of our rising stars (Chelsea Lomprey) did the heavy lifting in drafting a client alert on…
Current Compensation Issues (Part 6 of 7): Modifying or Terminating a 10b5-1 Trading Plan
An executive of a publicly-traded company would not have anticipated today’s market volatility and depressed stock price when he or she entered into a 10b5-1 trading plan in 2019. As a result, this executive will probably want to amend or terminate such trading plan. The purpose of this Post is to provide a quick reminder of the applicable issues that should be considered. This Post is Part 6 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy.
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Current Compensation Issues (Part 5 of 7): Revisit Stock Ownership Policy Requirements
The purpose of this Post is remind publicly-traded companies to revisit their stock ownership policies to determine whether a temporary waiver of the policy requirements is advisable. This Post is Part 5 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers…
Current Compensation Issues (Part 4 of 7): Retention Packages to Discourage Poaching
The purpose of this Post is to highlight whether Compensation Committees should be offering retention packages to their executive officers to discourage their being poached by another company. This Post is Part 4 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive…
Current Compensation Issues (Part 3 of 7): Address Outstanding Performance-Based Equity Awards
This post is part of a 7-part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy. The titles of each of the 7-parts in this series are listed at the bottom of this post. This Part 3 is entitled “Address Outstanding Performance-Based Equity Awards,” and provides some alternatives that Compensation Committees could consider with respect to outstanding performance-based equity awards that have currently unachievable performance goals. Such alternatives include (listed in no particular order, and not an exhaustive list):…
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Current Compensation Issues (Part 2 of 7): Consider Changes to Increase Cash Flow
This post is part of a 7-part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy. The titles of each of the 7-parts in this series are listed at the bottom of this post. This Part 2 is entitled “Consider Changes to Increase Cash Flow,” and provides some ideas that a Compensation Committee could implement that could work to increase the company’s cash flow and produce positive proxy disclosure. Such ideas are (listed in no particular order, and not an exhaustive list):…
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Current Compensation Issues (Part 1 of 7): Considerations with Respect to Upcoming Equity Grants
Today’s economic environment has resulted in substantial loss of value to many shareholders and executives of publicly traded companies (i.e., the latter losing substantial value in their stock holdings, and too, losing prospective realizable pay as a result of unattainable performance goals within their outstanding performance-based awards). In most situations, the shareholders and the executives are aligned in such loss. But a problem is that substantial loss at the executive level could increase undesired poaching and turnover of key executives at a time when executives should be focused on navigating the company through a reopening of the United States economy. To overcome this problem, compensation committees of publicly traded companies (“Compensation Committees“) will likely need to consider adjustments to the company’s compensation framework in order to continue to incent and retain executives. To that end, this Part 1 (of a 7-part series) provides thoughts that the Compensation Committee should consider with respect to upcoming equity grants.
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