north america Articles

The Era of Low ESPP Participation Is Over

Aon has partnered with Carver Edison to aid plan sponsors in understanding the impact to financial reporting, tax accounting and company balance sheet of a Carver Edison ESPP as compared to a traditional ESPP.

Sizing the SaaS Sales Organization for Growth

There is no one-size-fits-all approach for how to best scale sales organizations for private software companies, but there are benchmarks and proven approaches to scale cost-effectively.

Glass Lewis Updates Proxy Reports to Reflect Sustainability Metrics and Corporate Meetings

Glass Lewis made notable updates to its 2019 proxy season reports, including analyzing how new sustainability standards impact issuers and disclosing whether it has met with a company.

Developing a Winning People Strategy for New Types of Technology Jobs at Retail Companies

As retail companies rapidly integrate technology-related jobs to their workforce, they find hiring and retaining people with these skills requires re-examining their rewards structures.

How to Use Employee Mobility Data to Uncover Potential Problems in Your Workforce

Assessing and understanding employee mobility within a business is essential for unlocking insights into your workforce and organizational structure. We outline our latest research on employee mobility in the technology sector to illustrate how this analysis can benefit all companies.

Investors See Expanded Role for Boards of Directors in Overseeing Corporate Culture

As part of their annual shareholder engagement, State Street and BlackRock are urging boards to do more in overseeing corporate culture; this vision would greatly expand the traditional role of boards and continue to elevate ESG issues.

It’s Time for HR to Become More Involved in Setting Sales Quotas. Here’s How.

HR professionals need to know how their company’s sales quotas shape the employee value proposition and contribute to competitive earnings and cost-of-sale measures. By becoming more involved in the quota-setting process, HR leaders will help better position the company against the headwinds of high turnover and a tightening talent pool.

How the SEC’s Hedging Disclosure Rule Will Impact Public Companies

The SEC finalized a long-awaited hedging rule from the Dodd-Frank Act in December 2018. The rule requires disclosure of companies’ anti-hedging policies for all employees. We explain how companies need to comply.

IRS Clarifies Tax Law Provision that Could Benefit Private Company Employees

The IRS recently released guidance about the applicability of a provision in the 2017 tax bill that could benefit employees at private companies who receive equity awards. The guidance specifies the conditions for employees to be eligible for tax relief and the responsibilities of private companies.

ISS Policy Changes May Make It Harder for Some Companies to Obtain Equity Share Approval

ISS has clarified how it will implement changes to its Equity Plan Scorecard and released updated burn rate tables. The changes could make it harder for some companies to win approval for new shares or receive approval for as many shares as in the past.

What Public Companies Should Know About New Standards for ESG Disclosure

A significant number of investment managers have pledged support for new industry-specific environmental, social and governance reporting standards for public companies that were recently published by the Sustainability Accounting Standards Board. At a minimum, a company should be conversant in the SASB standards for its industry and assess to what extent it believes the standards are relevant to the company.

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. 

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.

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.
 

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.

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. 

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.

 

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