Executive Compensation Archives - Page 15 of 26

New Proposed Section 83 Regulations Clarify What Constitutes a Substantial Risk of Forfeiture

by McDermott Will & Emery | May 30, 2012 | Executive Compensation

Earlier today, the Internal Revenue Service (IRS) released new proposed Section 83 regulations, which clarify several points including:

A substantial risk of forfeiture (SRF) may be established only through a service condition or a condition related to the purpose of the transfer. Citing the U.S. Court of Appeals for the First Circuit’s opinion in Robinson, the preamble noted that “[s]ome confusion has arisen as to whether other conditions may also give rise to a substantial risk of forfeiture.” The proposed regulations retain the language from Section 83 final regulations that refraining from service may be a service condition.
In determining whether a SRF exists, it is necessary to consider both (a) the likelihood that the forfeiture event will occur, and (b) the likelihood that the forfeiture will be enforced. All of the facts and circumstances must be evaluated to determine whether a performance-based vesting condition for a restricted stock award will be treated as a substantial risk of forfeiture for purposes of Section 83.
Transfer restrictions such as lock-up agreements, Rule 10b-5 insider trading restrictions) do not create a SRF – in other words, they do not defer the taxable event – even if there is a potential for forfeiture or disgorgement of some or all of the property, or other penalties, if the restriction is violated. The only exception to this rule is with respect to Section 16(b) “short swing” profit liabilities. The proposed regulations provide three new examples illustrating when transfer restrictions will – and will not – constitute a SRF. The proposed regulations incorporate the IRS’ position in Revenue Ruling 2005-48.

These regulations under section 83 are proposed to apply to transfers of property on or after January 1, 2013. Taxpayers may rely on the proposed regulations for property transfers occurring after the publication of the proposed regulations until further notice. Comments are due by August 28, 2012.

Further details on the newly proposed regulations will be provided in subsequent McDermott publications.

Executive Travel on Corporate Aircraft–Strategies for Regulatory Compliance and Tax Efficiency

by McDermott Will & Emery | May 17, 2012 | Executive Compensation

by Ruth Wimer

Recent press coverage of Internal Revenue Service and U.S. Securities and Exchange Commission problems with executive travel on company aircraft makes continued use challenging. The known benefits of business-owned aircraft include security, privacy and efficiency, particularly in light of delays inherent in commercial travel. This newsletter describes in plain English the basic requirements and strategies for dealing with the myriad rules presented with respect to executive and guest travel on company aircraft, and recommends as a solution the adoption of a carefully drafted executive aircraft use policy.

To read the full article, please click here.

JOBS Act Lightens Exec Comp Disclosure Burden

by McDermott Will & Emery | May 1, 2012 | Executive Compensation

by Andrew C. Liazos

Well, for emerging growth companies, at least. The new law also exempts such firms — which are planning an IPO and have less than $1 billion in revenue — from holding a “say-on-pay” vote.

Please click here to read the full article.

Will Auditors Influence How Executives Are Paid?

by McDermott Will & Emery | Mar 20, 2012 | Executive Compensation

by Andrew C. Liazos

Public Company Accounting Oversight Board (PCAOB) proposals would have auditors reading the employment and compensation contracts of corporate leaders and, possibly, forcing changes to comp programs due to unacceptable risks of material restatement.

To read the full article, click here.

Not Just a Tax Issue: Lawsuits Crop Up over IRS 162(m)

by Jackie Sinn | Jan 26, 2012 | Benefit Controversies, Executive Compensation

by Andrew Liazos

Proxy season is now upon us, and a key task is to evaluate whether shareholder approval is needed for any executive compensation plan. One of the typical reasons to seek shareholder approval is to qualify for tax-deduction relief under Section 162(m) of the Internal Revenue Code. By and large, seeking shareholder approval for that purpose has been viewed as a relatively routine task. However, recent shareholder derivative lawsuits suggest that public companies should take a careful look at disclosures that solicit Section 162(m) shareholder approval.

Read the full article on CFO.com.

ISS Updates Proxy Voting Guidelines for 2012

by McDermott Will & Emery | Jan 6, 2012 | Executive Compensation

by David A. Cifrino, Thomas P. Conaghan, Andrew C. Liazos, Anne G. Plimpton and Heidi Steele

ISS has released its annual update to its proxy voting guidelines for the 2012 proxy season. The update reflects changes in ISS’s pay-for-performance evaluation methodology, responses to say-on-pay votes and say-on-pay frequency votes and a number of social and environmental policies.

To read the full article, click here.

Employee Benefits & Compensation: What You Should Do Before Year End

by McDermott Will & Emery | Nov 7, 2011 | Employee Stock Ownership Plans (ESOPs), Employment, Executive Compensation, Fiduciary and Investment Issues, Health and Welfare Plans, Labor, Retirement Plans

Friday, November 18, 2011
10:00 – 11:00 am CST

As the year draws to a close, please join us for a focused and concise update on the most important employee benefit issues.

Mark your calendars
McDermott Will & Emery will present a 60-minute complimentary webcast, hosted by the leaders of our employee benefits and compensation practice, that will highlight key year-end considerations for:

Health and welfare benefits
Qualified and non-qualified retirement plan
Plan fiduciary and investment management
Executive compensation
Fringe benefits
Domestic partner benefits

Who should attend
All vice presidents of human resources, in-house counsel, compensation and benefits directors, chief financial officers and others responsible for overseeing corporate or executive benefits and/or retirement plans.

To register, please click here.

For more information, please contact McDermott Events.

IRS Guidance Provides Employer-Provided Cell Phones May Generally be Treated as Nontaxable Fringe

by McDermott Will & Emery | Sep 16, 2011 | Employment, Executive Compensation

by Ralph DeJong, Ira Mirsky and Michael Fine

On Wednesday, September 14, 2011, the IRS issued Notice 2011-72, which provides long-awaited relief concerning the tax treatment for the employee use of employer-provided cellular telephones or other similar telecommunications equipment (e.g., PDAs and Blackberries):

The IRS will generally treat an employee’s business use of an employer-provided cell phone as a nontaxable working condition fringe benefit, without the need to meet onerous substantiation requirements.
The IRS will generally treat the value of any personal use of an employer-provided cell phone as a nontaxable de minimis fringe benefit.

The IRS guidance specifies that the business and personal use of an employer-provided cell phone provided by the employer will generally be treated as nontaxable to the employee, if the employer has provided the cell phone primarily for noncompensatory business reasons. Because it applies for taxable years beginning after December 31, 2009, the tax relief provided under the IRS Notice takes effect immediately.

To read the full article, click here.

Employee Benefits Blog Recognized as a Top 10 Compensation and Benefits Blog by HR Daily Advisor

by McDermott Will & Emery | Jun 14, 2011 | Benefit Controversies, Employment, Executive Compensation, Labor

McDermott’s Employee Benefits Blog was recently recognized as one of the Top 10 Compensation and Benefits Blogs by HR Daily Advisor. Thank you to those who follow our blog on a regular basis. We appreciate your support and please contact our editors if you have suggestions on trending topics you’d like to hear more about.

To read the HR Daily Advisor article, click here.

SEC Adopts Final Rules on Say-on-Pay, Say-on-Frequency and Say-on-Parachutes

by McDermott Will & Emery | Feb 1, 2011 | Executive Compensation

by Joseph S. Adams, David A. Cifrino, Thomas P. Conaghan, Andrew C. Liazos, Thomas J. Murphy and Anne G. Plimpton

The SEC recently adopted final rules regarding shareholder advisory votes on executive compensation, the frequency of say‑on‑pay votes and golden parachute arrangements. Public companies must provide shareholders with a say‑on‑pay vote and say‑on‑frequency vote at the first annual or other meeting of shareholders where directors are elected occurring on or after January 21, 2011. The say‑on‑parachutes vote and enhanced disclosure of golden parachute compensation will be required for initial filings by all public companies on or after April 25, 2011. While the final rules are similar to the proposed rules, understanding the differences will assist in preparing for the 2011 proxy season.

The address of the article is https://www.mwe.com/info/news/ots0111j.htm.

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