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ISS Clarifies 2019 Compensation Policy Updates

Similar to prior years, ISS has provided clarification regarding several of its compensation-related policies through a supplemental FAQ document. The FAQs address several important compensation policies, which we summarize in this alert.

Mandatory Post-Vest Holding Periods on ESPPs

Despite potential drawbacks, some companies have expressed an interest in adopting mandatory holding periods for their employee stock purchase plan because it gives them the ability to apply a discount for illiquidity to the fair value of the ESPP. We explain how to estimate the fair value for an ESPP with a mandatory holding period.

How to Save Money on Your ESPP

Employee Stock Purchase Plans are gaining in popularity, however, the valuation techniques used to derive accounting fair values can be complex and often misunderstood. Fortunately, with a better understanding of the valuation mechanics, there are ways to more accurately value ESPPs that also reduce the expense. 

What We Learned from CEO Pay Ratio Exemptions

The CEO pay ratio rule allows three types of employee exemptions from calculating the pay of the median employee. With the first year of disclosures mostly behind us, we take a close look at how these exemptions were used and whether they proved beneficial for companies.

Equal Pay Laws Shine Light on Difficulty of Defining “Equal”

The principles around gender pay equity sound basic: men and women should receive the same amount of pay for equal or similar work. However, when examining the California Fair Pay Act— one of many pieces of equal pay legislation that has swept the globe— it turns out that the implementation of this idea is anything but simple.

Determining the Fair Value of Your ESPP

Companies’ Employee Stock Purchase Plans can have myriad structures and features. The fair value of an ESPP depends on both the structure of the plan and the economic assumptions used in the valuation model. We explain how to get started calculating the fair value of your ESPP.

ISS, Glass Lewis Issue 2019 Policy Updates with Focus on Pay-for-Performance and Diversity

ISS' newly released draft policy updates for 2019 would swap GAAP metrics for EVA and adopt a voting standard around board diversity. Glass Lewis’ final policies are extensive in both compensation and corporate governance topics. We explain what the updates entail. 

Fewer Sales Organizations are Offering Car Allowance Plans Across the Globe

Even while declining in popularity, car allowance plans for sales employees are still a majority practice in many markets. We examine the latest trends in plan prevalence and eligibility using Radford Global Sales Survey data and offer tips for technology and life sciences companies reconsidering their car policies. 

How Long-Term Performance Plan Metrics Are Evolving in the Technology Sector

The elimination of 162(m) in the tax bill provides an opening for a new era in long-term incentive metrics. We analyze the direction incentive metrics are headed and what companies in different technology industries should think about with an eye toward the future.

Understanding the Impact of Performance Ratings in Differentiating Pay

With an increased focus both internally and externally on pay for performance, we examine how companies with different performance ratings systems are optimizing their merit budget.

How Biotech Companies are Scaling their Workforces for High Growth

Companies experiencing high growth need to engage in smart workforce planning and examine their compensation philosophy, culture and employee experience to stay competitive. We highlight important ways emerging growth biotech companies are taking these steps.
 

A Checklist for Fall Compensation Planning

At most companies, Fall is the start of compensation planning season. To help you prepare, Radford has developed a quick checklist for keeping your pay programs up to date.
 

When Your Sales Mobility Program Is Stuck in a Compensation Rut

Internal sales mobility moves are on the rise, driven by factors such as career development. However, these situations can be complicated from a compensation standpoint. We provide tips for companies encountering these situations, including whether to adopt a formal mobility program.
 

SEC Takes Closer Look at Conflicts of Interest at Proxy Advisory Firms

The SEC has ramped up its scrutiny of proxy advisory firms when, earlier this month, the agency made the unusual decision to rescind the findings from two No Action Letters that were issued by SEC staff in 2004. The letters asserted that investment advisers could rely on proxy advisory firms’ maintenance of policies and procedures to alleviate potential conflicts of interest. We explain the potential implications of the latest action for the corporate governance community.
 

What to Consider When Calculating Your CEO Pay Ratio in Year 2

Deciding whether to re-identify your median employee is a key question going into the second year of CEO pay ratio disclosures. We explain when the SEC requires companies to re-identify the median employee and the circumstances under which it’s not required but a good idea.

Robust UK Life Sciences Sector Prompts Efforts to Curb High Employee Turnover

The outlook for the UK life sciences sector is optimistic with aggressive hiring and employee turnover on the rise. This is causing firms to reinforce their efforts to retain top performers. We explain the talent and rewards strategies companies should think about.
 

How Health and Wellness Policies Affect Employee Performance: A Case Study

Our recent work with a pharmaceutical client to quantify the impact of their health and wellness programs on performance is an example of the valuable insights people analytics can uncover. We explain our process and key takeaways in this new case study.
 

IRS Releases Guidance Concerning Changes to Section 162(m) of the Internal Revenue Code

New guidance from the IRS on the tax bill’s treatment of 162(m) delves into the identification of covered employees, operation of the grandfather rule and modification of a written contract. Our new alert goes into detail on the application of these changes.
 

Technical Jobs Continue to Command Hefty Pay Premiums; Here’s How Companies Can Prepare

Base salary premiums for technical vs. non-technical jobs, for both professional individual contributor and management roles, continue to climb at technology companies across the United States. However, the rate of change is uneven, which means companies must pay close attention to the market. Our article highlights where the market is moving fastest and what companies can do about it.
 

ISS Policy Survey Hints at Changes to Pay-For-Performance, Director Pay and More

From gender diversity on boards to quantitative pay-for-performance screens and “excessive” director pay, ISS is considering 10 potential policy changes for 2019. We explain what each policy up for consideration entails and how likely it is to be changed.  
 

Is It Time for Your Compensation Philosophy to Evolve? We Think So.

As issues like gender pay equity and pay transparency grow in prominence, a number of companies are beginning to rethink how they describe their approach to setting pay. In our view, these new forces will eventually compel companies to rethink and rewrite their compensation philosophies. 

Why Some Technology Companies in Asia are Breaking Up Their Salary Broadbands

Creating broad salary bands is a common practice throughout much of Asia, but a growing number of technology firms are now developing narrower, more aggressive salary ranges to keep pace with the market for in-demand jobs. We explain when you should think about breaking up your salary bands, how to develop narrower ranges and questions you should ask your compensation and HR teams in the process.

Lessons from the 2018 Proxy Season for Say-on-Pay and Equity Plan Votes

The 2018 proxy season saw a drop in proxy advisor and shareholder support for Say-on-Pay and an increase in non-proxy advisor compliant equity share plans. We explain the factors behind proxy season trends and what those involved in executive compensation can do to prepare in the off season.

SEC Enforcement Action on Perks Disclosure Reminds Issuers to Be Mindful of the Standard

The SEC’s recent enforcement action against a large, US-based company for failure to properly disclosed executive perquisites is a good reminder to all issuers of the circumstances under which detailed disclosure is required.
 

To Compete for Talent, European Life Sciences Firms Burn More Equity Once Listed in the US

Life sciences companies headquartered in Europe have long used less equity compensation than their US peers. However, as more European companies list on US stock exchanges, and at earlier stages in their development cycles, a middle ground is emerging. In this article, we explore how US-listed European biopharma companies may encourage increased overhang and burn rates in Europe.
 

SEC Expands Scope of Companies that Qualify for Reduced Compensation Disclosure

The SEC recently amended its definition of smaller reporting companies (SRCs), which could pave the way for nearly a thousand additional companies to take advantage of reduced compensation disclosure requirements. However, it may not be wise for every qualified company to scale back their disclosures, particularly if they have active investors who have expressed concerns via Say-on-Pay votes in the past.

Executive Compensation Summer Checklist: Take Steps Now to Prepare for Your Year-End

Are you looking for some ways to reduce the stress of your next executive compensation planning cycle? Follow our summertime executive compensation checklist to discover three important tasks you can take care of now to make your Q3 and Q4 far less hectic.

Tech Convergence in Financial Services Industry: Your Questions Answered

The convergence of financial services and technology has caused firms to put the transformation of their workforce at the center of their strategy. Companies are focused on exploring new ways of working, redesigning their organizational structures, evaluating their entire employee value proposition to improve engagement, and making strategic investments in new skills and technology to support this transformation. In order to compete with tech firms and with the growing popularity of the Silicon Valley approach to attracting and retaining key employees, financial firms must acknowledge that the broader ecosystem of rewarding digital talent is changing and transform their value proposition with it.

CEO Pay Ratios Are In. Here’s What We’ve Learned So Far.

The first year of CEO pay ratio disclosures are in for most public companies. Our latest article includes several key findings for the technology and life sciences sectors that will be helpful as companies think about how this new data could be used by stakeholders in the future.
 

Five Ways to Get More from Your Merit Budget

During annual performance cycles, compensation professionals spend a lot of time thinking about the size of the merit pool and who gets how much of an increase. However, less time is spent on the factors that go into how the pool is delivered. We delve into five strategies you can use to get more from your merit budget.
 

 

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