The purpose of this Post is to highlight the question of whether, in today's economic environment, deferred compensation monies should be secured with a secular trust.  This Post is Part 7 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy.

Background

It is well-settled that the assets of non-qualified deferred compensation programs are subject to the claims of the company’s general creditors.  Securing the assets with a Rabbi Trust does nothing to change that answer.

With today's market volatility and many companies struggling to survive, some executives may not value deferred dollars because of the fear that these deferred dollars will be swept by the company's creditors.  And if the executives do not value the program, then the program is not providing the necessary incentive and retention benefits.  So does it make sense to consider a different vehicle or approach?

Just a quick note that our upcoming monthly webinar is entitled "Administrative Perspectives on Granting Compensatory Equity Awards: A Checklist of Action Items," and will be held this Thursday, May 14, 2020, from 10:00 am to 11:00 am Central.  The purpose of this webinar is to provide a checklist of design and administrative considerations associated with grants of compensatory equity awards, and will be discussed at an intermediate level.  You can register at the above link.

An executive of a publicly-traded company would not have anticipated today's market volatility and depressed stock price when he or she entered into a 10b5-1 trading plan in 2019.  As a result, this executive will probably want to amend or terminate such trading plan.  The purpose of this Post is to provide a quick reminder of the applicable issues that should be considered.  This Post is Part 6 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy.

The purpose of this Post is remind publicly-traded companies to revisit their stock ownership policies to determine whether a temporary waiver of the policy requirements is advisable.  This Post is Part 5 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy.

Stock Ownership Policies Typically Denominated in Dollars

Equity ownership goals within stock ownership policies are typically denominated in shares or dollars (the latter being a fixed ...