Compensation Design

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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):…
Continue Reading 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 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):…
Continue Reading Current Compensation Issues (Part 2 of 7): Consider Changes to Increase Cash Flow

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.
Continue Reading Current Compensation Issues (Part 1 of 7): Considerations with Respect to Upcoming Equity Grants

Join us on April 9, 2020 from 10:00 am to 11:00 am Central for our FREE monthly webinar on “Executive Compensation Considerations in Light of Market Volatility, Stock Prices and the Unknown,” where we will discuss compensatory issues to consider as a result of failed (or failing) performance-based compensation metrics and lost value to the…

Many publicly-traded issuers in today’s environment have outstanding equity awards with performance goals that are unlikely to be achieved.  In response, Compensation Committees of such issuers will need to strike a balance between incentivizing/retaining executives and dealing with the stark reality that shareholders have lost substantial value.  To that end, Compensation Committees are likely to…

This is a just a quick note that proposed Treasury regulations were issued under Section 162(m) that reverses a series of private letter rulings previously granted to UPREITs.  Under the proposed Treasury regulations, the $1mm deduction limitation under Section 162(m) would apply with respect to compensation that a publicly-traded REIT’s covered employee receives from an…

Compensation governance is a front-and-center topic with a continued focus on stock ownership and clawback policies (in part due to the voting guidelines of institutional investors, proxy advisory firms and the Dodd-Frank Act).  At 10:00 am Central on Thursday, October 10, 2019, in a webinar entitled “Stock Ownership Policies & Clawback Policies: Design Pointers,” our…