general Articles

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. 

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.

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.
 

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. 

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.
 

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.

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.
 

Demystifying Pay in India: How to Structure Compensation for Local Practices

Compensation planning in India requires extensive knowledge of local market practices given the many unique rewards terms and structures found in the country. Following the tips we provide in this article will help you set out on a path toward developing well-understood, tax efficient, legally compliant and competitive pay packages in India.

Does Your Sales Incentive Plan Really Pay for Performance? Ask These Questions to Find Out.

With so much of a salesperson’s compensation delivered through variable, performance-based pay, sales leaders need to continually monitor pay-for-performance mechanisms to ensure they remain fair, motivating and in-tune with business needs. However, we often rely too heavily on data-driven assessments to measure plan performance. Sometimes asking the right qualitative questions to the right people can make a huge difference.
 

What Every Rewards Professional Should Know About China’s Changing Workforce

For decades, China focused on rapid economic growth. Now, the emphasis is on grooming quality talent and companies. To successfully navigate this transformation, HR and rewards managers should pay attention to four big developments.

Don’t Let Stale Survey Data Keep You from Being Competitive

With so many different types of compensation survey providers in the market— including a growing list of online, crowdsourced data sources— how do you know which ones are right for you? Our article outlines the pros and cons of different survey types and how to use survey data to its full potential.

Brazil’s New Labor Law Grants Employers More Flexibility in Their Hiring and Pay Programs

While companies are right to take a wait-and-see approach as Brazilian courts iron out key grey areas in the country’s new labor laws, taking time now to plan for change is prudent. After all, the new laws are widely expected to give companies more flexibility in their hiring and remuneration policies going forward.

Proposed Tax Bill Retains Some Provisions that Impact Exec Pay; Here’s What You Should Know

The tax overhaul bill being debated in the US Congress would make changes to the tax deductibility of performance-based compensation for named executive officers, including the CFO. Follow our client alert to stay informed on how the bill affects executive compensation as the legislation moves through Congress.

Maternity Matters: What India’s Amended Maternity Benefit Act Means for Companies

Thanks to recent amendments to its maternity benefits law, India now ranks among the top countries for longest paid maternity leave. Our client alert explains what the new law changes and how companies are beginning to comply.

Radford’s Approach to Valuing Equity Compensation

Designing effective equity programs is one of the most important roles for human resources and compensation professionals. But before companies can design an effective equity program they need to gather market data and have a common methodology for valuing that data.

Revisiting 13th and 14th Month Bonus Rules in Latin America, Europe, Africa and Asia

Around the world, from Latin America to Europe to Africa to Asia, 13th and 14th month bonuses are a fairly common practice. Yet, the rules of the road vary widely from country to country, making compliance a challenge for HR teams. Our latest article examines current requirements and practices in more than 45 nations.

UK Gender Pay Reporting Law Provides an Opportunity to Strengthen Rewards Programs

In an effort to close the gender pay gap, the UK government’s Gender Pay Gap Reporting Regulations go into effect in April 2017. Our new client alert provides tips for compliance as well as voluntary measures all companies can take to proactively address potential inequalities in their rewards programs.

 

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