Publicly-traded issuers losing (or about to lose) Emerging Growth Company ("EGC") status will have to include a CD&A within their proxy statement.  Since CD&A disclosure significantly drives compensation design, issuers losing EGC status will need to consider various business points that will likely change their compensatory programs.  Such business points include: (i) memorializing a compensation philosophy, (ii) establishing performance incentives that "disclose" well, (iii) discussing compensation governance mechanisms, and (iv) deciding whether to appease the thoughts from institutional shareholder advisory services such as ISS.  Sound easy enough?  Yes, but only if the Compensation Committee is adequately informed and has time to consider and implement any compensatory changes.

On October 11, 2018 (10:00 am Central), we are hosting a webinar entitled "Compensation Changes Due to Loss of EGC Status (Phase II of II)."   The purpose of this webinar is to discuss business points that an issuer losing EGC status will need to consider with respect to its compensatory programs.  Click here to register: "Compensation Changes Due to Loss of EGC Status (Phase II of II)."  And as always, our monthly webinar series is FREE.

If an employer grants one of its employees a restricted stock award, should that employee make an 83(b) election at the time the restricted stock award is granted?  What is the upside to the employee if he or she makes an 83(b) election?  What are the risks to the employee?  The answers to those questions are this “Tip of the Week.”

On September 13, 2018, the SEC withdrew two no-action letters issued in 2004 to two proxy advisory firms.  Some folks (like me!) are hopeful that the withdrawal of these no-action letters is a first step (albeit a small step) towards proxy advisory firm reform.  If you would like to learn more about this topic, please see our Firm's client alert entitled "Proxy Advisory Firm Guidance Withdrawn by the SEC," which our Firm published this morning.

Tomorrow I am speaking on "Trends in Designing Performance-Based Equity Awards" at the HC&B Total Rewards Summit in Houston, Texas.  Discussion points include: (i) applicable forms of equity incentives conducive to performance-based awards, (ii) the more common performance metrics used to drive behavior, (iii) typical payout levels and performance periods, (iv) total shareholder return formulas, (v) administrative issues associated with accelerated vesting provisions upon retirement, (vi) maximizing capital gains with 83(b) elections, and (vii) recent revisions to ...

Though relative Total Shareholder Return ("TSR") programs offer no direct line of sight for the executive to chase the business goal, such programs continue to remain the most common metric within an issuer's performance-based equity program.  In designing these programs, a common question is how payouts could be adjusted if the issuer's stockholders realize negative returns and lose money during the measurement period.  The answer to that question is this "Tip of the Week."

We previously posted on grandfather treatment under the Tax Cuts and Jobs Act (the "Act"), as clarified by Notice 2018-68.  This post is an extension of our prior post and is intended to highlight that an issuer's PFO is subject to a slightly different analysis with respect to Grandfather Treatment (defined below).

Determining the "date of grant" of an equity award is important if the issuer desires accurate accounting charges and compliance with applicable tax laws.  Though such determination is typically straight forward, there are three common situations where identifying the date of grant could become more complex.  Addressing these three factual scenarios is this "Tip of the Week."