This Client Alert examines the accounting changes wrought by Accounting Standards Update (ASU) No. 2016-09 to Accounting Standards Codification Topic 718, Compensation-Stock Compensation, including a change to the share withholding and forfeiture requirements.
Download Client Alert (PDF) This Client Alert looks at the policy updates from Institutional Shareholder Services (ISS) and Class, Lewis & Co., LLC that involve compensation and directors. The Appendix of this Alert also includes the ISS 2016 Burn Rate Benchmarks.
Download Client Alert (PDF) On April 29, 2015, the U.S. Securities and Exchange Commission (SEC) approved the issuance of proposed rules to implement Section 953(a) of the Dodd-Frank Act regarding the disclosure of pay versus performance. This Client Alert is a follow-up to our initial Client Alert (4/29/2015) on these proposed rules and takes a closer look at the proposed rules based on the proposing SEC Release.
Download Client Alert (PDF) On April 29, 2015, the U.S. Securities and Exchange Commission (SEC) met and approved the issuance of proposed rules to implement Section 953(a) of the Dodd-Frank Act regarding the disclosure of pay versus performance. This Client Alert looks at the proposed rules based on an SEC Fact Sheet that was prepared for the meeting.
Download Client Alert (PDF) On March 31, 2015, the Internal Revenue Service (IRS) published final regulations under Section 162(m) of the Internal Revenue Code. The IRS indicated that the regulations are not intended to embody substantive changes, but rather clarification of certain aspects of the application of Section 162(m).
Download Client Alert (PDF) On December 22, 2014, ISS released Frequently Asked Questions on its 2015 U.S. Equity Plan Scorecard Policy (FAQs) just in time for Christmas. Sadly, it looks like the Grinch may have gotten to the FAQs before release because some of the terms that ISS suggested were going to be covered were given short shrift by the explanations. This Client Alert analyzes the FAQs and provides commentary on potential implications.
Download Client Alert (PDF) Both Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co., LLC (Glass Lewis) have issued their policy updates for the 2015 proxy season. This Client Alert focuses on their policy updates concerning compensation matters. ISS has introduced changes to its policy for evaluating equity plan proposals and has also revised certain thresholds used in the quantitative tests for the pay-for-performance evaluation of say-on-pay proposals. Glass Lewis provided more context regarding its say-on-pay policy and also provided more details regarding how it evaluates employee stock purchase plan proposals. This Client Alert also provides details on how companies can provide updated peer group information to Equilar so it gets utilized by Glass Lewis in its pay-for-performance evaluations.
Download Client Alert (PDF) On June 30, 2014, the U.S. Securities and Exchange Commission issued Staff Legal Bulletin No. 20 (SLB 20), which provides guidance for investment advisers concerning their proxy voting responsibilities as well as discusses the availability of exemptions from the proxy rules for proxy advisory firms, e.g., Institutional Shareholder Services, Inc. and Glass Lewis & Co., LLC. This Client Alert looks at the guidance provided by SLB 20, which does not represent a significant change from prior industry practice.
Download Client Alert (PDF) On January 31, 2014, Bloomberg BNA's Pension & Benefits Daily published this article by Exequity's Ed Hauder. The article looks at companies whose say-on-pay (SOP) votes failed in 2012 (and 2011) and who have reported their SOP votes for 2013, and some of the actions these and other companies with failed SOP votes can take to turn things around, as well as the success this group of companies had with their 2013 SOP votes. Charts looking at 2011, 2012 and 2013 SOP votes, change in CEO total compensation, and total shareholder return (TSR) for the 1-, 3- and 5-year period as of the most recent fiscal year-end to 2011, 2012 and 2013 are also included.
Download Article (PDF) On September 18, 2013, more than three years after the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) became effective, the Securities and Exchange Commission (SEC) issued a proposed rule to implement the mandate contained in Section 953(b) of the Dodd-Frank Act. This Client Alert looks at the proposed CEO Pay Disclosure Rule and discusses some of the rule's issues and implications.
Download Client Alert (PDF) On October 16 2012, ISS issued draft 2013 Policies for comment. Comments can be submitted through October 31, 2012. The draft policies include several proposed revisions to ISS's Management Say-on-Pay proposal policy as well as several other draft policies that could impact compensation. This Client Alert sumamrizies these draft policy changes, details the questions ISS has posed for comment and shares Exequity's thoughts on these draft 2013 Policies.
Download Client Alert (PDF) On September 25, 2012, the New York Stock Exchange (the "NYSE") and, on September 26, 2012, the NASDAQ Stock Market ("NASDAQ") filed proposed changes to their rules for listed companies with the Securities and Exchange Commission (the "SEC"). The NYSE and NASDAQ proposed rule changes are intended to implement the final rules the SEC passed in June 2012 to comply with the provisions of Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 10C to the Securities Exchange Act of 1934. This Client Alert provides an overview of these proposed changes, the proposed timing for their implementation, and Exequity's commentary on the rules.
Download Client Alert (PDF) On October 9, 2012, Bloomberg BNA's Pension & Benefits Daily published this article by Exequity's Ed Hauder. The article looks at companies whose say-on-pay (SOP) votes failed in 2011 and have reported their SOP votes for 2012, some of the actions these and other companies with failed SOP votes can take to turn things around, as well as the success this group of companies had with their 2012 SOP votes, and includes charts looking at 2011 and 2012 SOP votes, change in CEO total compensation, and TSR and percentile rank against companies' GICS groups.
Download Article (PDF) ISS's parent, MSCI Inc., filed its proxy March 19, 2012 for its annual shareholder meeting on May 2, 2012. ISS has indicated that it will not issue one of its Proxy Reports for MSCI as that would present a conflict of interest. Without an ISS Proxy Report, we will not know how MSCI would fare under ISS's revised Pay-for-Performance (P4P) and Say-on-Pay (SOP) policies for 2012. Given that Exequity has conducted a significant number of P4P analyses in light of ISS's 2012 P4P and SOP policies, we thought we could address this gap by offering our assessment of MSCI on these issues. This Client Alert contains our summary review of MSCI's compensation practices as disclosed in its proxy statement as well as a report detailing Exequity's estimated P4P Analysis for MSCI.
Download Client Alert (PDF) On December 19, 2011, Institutional Shareholder Services (ISS) issued its technical document that details its pay-for-performance (P4P) methodology for 2012. The technical document lays out ISS's quantitative and qualitative assessment methodologies under its P4P policy for 2012. This Client Alert summarizes the key details of ISS's 2012 P4P methodology.
Download Client Alert (PDF) On October 18, 2011, Institutional Shareholder Services Inc. (ISS) issued draft 2012 Policies for comment. Comments can be submitted through October 31, 2011. This Client Alert looks at the compensation-related policies and includes our commentary on these draft policies.
Download Client Alert (PDF) Institutional Shareholder Services, Inc. (ISS) recently posted its 2011-2012 Policy Survey. This Alert looks at the compensation related questions in the survey, providing Exequity's commentary on them. We strongly encourage companies to respond to ISS's survey before it closes August 3, 2011.
Download Client Alert (PDF) The IRS recently issued new proposed regulations under Code Section 162(m) that clarify: (1) what companies must do in order to successfully utilize the performance-based compensation exception to the Code Section 162(m) limit; and (2) what compensation can qualify for the IPO compensation relief from Code Section 162(m). This Client Alert looks at these new proposed regulations. The IRS is accepting comments until September 22, 2011.
Download Client Alert (PDF) Fidelity recently issued its 2011 Proxy Voting Guidelines. This Client Alert summarizes the changes to the Fidelity Proxy Voting Guidelines related to compensation, especially as related to equity compensation plans. The Client Alert includes a summary of the compensation portions of the guidelines.
Download Client Alert (PDF) On March 30, 2011, the Securities and Exchange Commission issued proposed rules to implement the provisions of Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 10C to the Securities Exchange Act of 1934. This Client Alert provides an overview of these proposed rules, a timeline for future actions related to the proposed rules, and Exequity's commentary on the proposed rules. Finally, the Client Alert includes a summary of Section 10C by provision along with the corresponding newly proposed rules. UPDATED May 2, 2011 to indicate comment period extended to May 19, 2011.
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