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Thoughtful Pay Alerts Archive

Revisiting Relative TSR

June 6, 2016

Designing an incentive compensation plan with a performance measure involving relative total shareholder can pose significant challenges. How you answer several key questions can help that your plan meets your business objectives while serving as an effective motivational tool for your executives.

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Congressional Committee Debates Proxy Advisor Reform Bill

May 26, 2016

Recently, the House Financial Services Committee held a hearing on a bill that would regulate the activities of proxy advisory firms. This Thoughtful Pay Alert summarizes the provisions of this bill.

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“Say on Pay” at the Bay Area Tech 120 – A Final Look at 2015

January 11, 2016

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2015 Say-on-Pay votes conducted by the companies in the Bay Area Tech 120. This article includes the results disclosed through the end of 2015.

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“Say on Pay” at the Life Sciences 80 – A Final Look at 2015

January 11, 2016

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2015 Say-on-Pay votes conducted by the companies in the Life Sciences 80. This article includes the results disclosed through the end of 2015.

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ISS Updates Burn Rate Tables for 2016 Proxy Season

December 21, 2015

ISS has updated its "burn rate" tables, which influence its voting recommendations on equity plan proposals, for 2016. Our latest Thoughtful Pay Alert highlights these updates, which provide notable changes in the burn rate levels for technology and life sciences companies.

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ISS Issues 2016 Policy Updates

November 27, 2015

Institutional Shareholder Service has updated the policies that it will use in 2016 to make voting recommendations for its institutional investor clients on matters to be addressed at annual meetings of shareholders during the 2016 proxy season. These updates are effective for annual meetings taking place on or after February 1, 2016.

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ISS Issues Reminder about Updating Peer Group Ahead of 2016 Proxy Season

November 23, 2015

ISS is now accepting updates to a company’s compensation peer group in advance of its review of the company’s executive compensation program as disclosed in its 2016 proxy statements.

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Employee Stock Plan Proposals at the Bay Area Tech 120

September 30, 2015

We’ve compiled the results on the employee stock plan proposals submitted for shareholder action by the Bay Area Tech 120 during the 2015 proxy season. Here’s our summary of the proposals and the voting results from these proposals.

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SEC Adopts CEO Pay Ratio Disclosure Rules

August 31, 2015

The SEC has adopted final rules to implement the CEO pay ratio disclosure requirement of the Dodd-Frank Act. Our latest Thoughtful Pay Alert summarizes the key provisions of, and provides our initial observations on, the final rules. This is a longer version of the article that we published on August 7, 2015 outlining the key aspects of the proposed rules.

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SEC Adopts CEO Pay Ratio Disclosure Rules

August 7, 2015

The SEC has adopted final rules to implement the CEO pay ratio disclosure requirement of the Dodd-Frank Act. Our latest Thoughtful Pay Alert summarizes the key provisions of the final rules.

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“Say on Pay” at the Life Sciences 80 – A First Look at 2015

July 31, 2015

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2015 Say-on-Pay votes conducted by the companies in the Life Sciences 80. This article includes the results disclosed through July 15, 2015.

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“Say on Pay” at the Bay Area Tech 120 – A First Look at 2015

July 24, 2015

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2014 Say-on-Pay votes conducted by the companies in the Bay Area Tech 120. This article includes the results disclosed through the middle of July 2015.

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SEC Proposes Compensation Recovery (“Clawback”) Rules

July 10, 2015

The SEC has proposed rules to implement Section 954 of the Dodd-Frank Act, the provision that requires companies listed on the national securities exchanges to adopt and enforce a compensation recovery (“clawback”) policy to recoup excess incentive-based compensation (which may include certain stock options) from their current and former executive officers in the event that they are required to restate their financial statements because of material noncompliance with the accounting standards under the federal securities laws.

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ISS Issues Mid-Year Reminder about Updating Compensation Peer Group

June 30, 2015

ISS is now accepting updates to a company’s compensation peer group in advance of its review of the company’s executive compensation program in connection with Annual Meetings of Shareholders being held during the second half of 2015.

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SEC’s Proposed “Pay versus Performance” Disclosure Rules Likely to Present Numerous Challenges

May 20, 2015

The SEC’s proposed “pay versus performance” rules are likely to create a number of compliance challenges.

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Protecting Your Director Compensation Decisions from Claims of “Excessive Pay”

May 15, 2015

A recent decision in the Delaware Court of Chancery serves as a clear reminder of the importance of placing limits on the number of shares that can be granted as equity awards to members of a company’s board of Directors.

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SEC Proposes Rules to Implement Pay versus Performance Disclosure Requirement

May 5, 2015

The SEC has proposed rules to implement Section 953(a) of the Dodd-Frank Act, the provision that requires companies to discuss in their proxy statement the relationship between executive pay and their financial performance.

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Avoiding the $1 Million Tax Trap – New Section 162(m) Regulations Affect Use of RSUs by IPO-Companies

April 24, 2015

Recent IRS rules on the $1 million deduction limit add a level of complexity to the use of RSU awards by newly-public companies.

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“Say on Pay” at the Bay Area Tech 120 – A Final Look at 2014

January 8, 2015

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2014 Say-on-Pay votes conducted by the companies in the Bay Area Tech 120. This article includes the results disclosed through the end of 2014.

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“Say on Pay” at the Life Sciences 80 – A Final Look at 2014

January 8, 2015

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2014 Say-on-Pay votes conducted by the companies in the Life Sciences 80. This article includes the results disclosed through the end of 2014.

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ISS Issues Reminder about Updating Peer Group Ahead of 2015 Proxy Season

December 2, 2014

ISS is now accepting updates to a company’s compensation peer group in advance of its review of the company’s executive compensation program as disclosed in its 2015 proxy statements.

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ISS Issues 2015 Policy Updates

November 14, 2014

Institutional Shareholder Service has updated the policies that it will use in 2015 to make voting recommendations for its institutional investor clients on matters to be addressed at annual meetings of shareholders during the 2015 proxy season. Of particular significance, ISS has made major revisions to its policy for evaluating employee stock plan proposals. These updates are effective for annual meetings taking place on or after February 1, 2015.

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ISS to Launch Governance QuickScore 3.0 in November

October 20, 2014

Institutional Shareholder Services (“ISS”) is releasing version 3.0 of its Governance QuickScore tool on November 24th. QuickScore assesses a company’s potential governance risks in four key areas – shareholder rights, compensation, audit practices, and board structure. Our latest Thoughtful Pay Alert summarizes what we currently know about the pending update, and notes that, in advance of its release, ISS is giving companies from Novermber 3rd through November 14th to verify their data in the QuickScore database.

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ISS Seeks Comment on New Equity Plan “Scorecard” Policy

October 20, 2014

ISS is proposing a new policy for reviewing equity compensation plan proposal for the 2015 proxy season. This Thoughtful Pay Alert summarizes what we know about the new policy. ISS is seeking comment on the policy until October 29, 2014.

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Employee Stock Plan Proposals at the Bay Area Tech 120

September 30, 2014

The results are in on the employee stock plan proposals submitted for shareholder action by the Bay Area Tech 120 during the 2014 proxy season. Here’s our summary of the proposals and the voting results from these proposals.

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ISS Announces New Data Verification Portal for Equity Plans

August 21, 2014

ISS has announced the launch of a new website portal that can be used by companies to verify the accuracy of the data that it will use to evaluate their equity plan proposals.

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“Say on Pay” at the Bay Area Tech 120 – A First Look at 2014

July 15, 2014

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2014 Say-on-Pay votes conducted by the companies in the Bay Area Tech 120. This article includes the results disclosed through the end of June 2014.

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“Say on Pay” at the Life Sciences 80 – A First Look at 2014

July 15, 2014

We provide our annual latest Thoughtful Pay Alert analyzing the results of the 2014 Say-on-Pay votes conducted by the companies in the Bay Area Life Sciences 80. This article includes the results disclosed through the end of June 2014.

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Preparing for an IPO – Compensating Your New Directors

June 16, 2014

Our latest Thoughtful Pay Alert summarizes our study of recent trends among technology companies for compensation new directors as they prepare for an initial public offering.

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Section 162(m) – Compliance Relief for Newly Public Companies

March 27, 2014

In connection with their IPO, technology companies should develop a strategy for how they will address the potential impact of Section 162(m), the $1 million deduction limit on senior executive compensation. Our latest Thoughtful Pay Alert examines the different strategies that we often see.

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Section 162(m) – Litigation Issues for Mature Companies

March 27, 2014

The latest wave of executive compensation-related litigation involves alleged deficiencies with a company’s Section 162(m) compliance disclosure and/or technical violations of the exception to the $1 million deduction limit for “performance-based compensation.” We offer tips to help you minimize your potential exposure to these suits.

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10 Tips for Enhancing Your 2014 Executive Compensation Disclosure

February 5, 2014

Here is our annual list of tips for preparing your executive and director compensation disclosure in your 2014 proxy statement.

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ISS to Launch Updated Governance QuickScore 2.0 in February

January 13, 2014

Institutional Shareholder Services, the major proxy advisory firm, is releasing version 2.0 of its Governance QuickScore tool in mid-February. QuickScore assesses a company’s potential governance risks in four key areas – shareholder rights, compensation, audit practices, and board structure. Our latest Thoughtful Pay Alert summarizes what we currently know about the pending update, and notes that, in advance of its release, ISS is giving companies until February 7th to verify their data in the QuickScore database.

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Employee Stock Plan Proposals at the Bay Area 150

January 8, 2014

The results are in on the employee stock plan proposals submitted for shareholder action by the Bay Area 150 during the 2013 proxy season. Here’s our summary of the proposals and the voting results from these proposals.

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ISS Updates Burn Rate Tables for 2014 Proxy Season

December 31, 2013

ISS has updated its "burn rate" tables, which govern its voting recommendations on equity plan proposals, for 2014. Our latest Thoughtful Pay Alert highlights these updates, which provide notable changes in the burn rate levels for technology and life sciences companies.

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ISS Issues 2014 Policy Updates

December 11, 2013

ISS and Glass Lewis are now accepting updates to a company’s compensation peer group in advance of their review of the company’s executive compensation program as disclosed in 2014 proxy statements.

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ISS, Glass Lewis Issue Reminders about Updating Peer Group Ahead of 2014 Proxy Season

November 20, 2013

ISS and Glass Lewis are now accepting updates to a company’s compensation peer group in advance of their review of the company’s executive compensation program as disclosed in 2014 proxy statements.

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“Say on Pay” at the Bay Area 150 – A Look at Year Three

September 30, 2013

Our latest Thoughtful Pay Alert provides our annual review of the results of the 2013 Say-on-Pay votes conducted by the companies in the Bay Area 150. This article includes the results disclosed through the beginning of September 2012.

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SEC Proposes Rules to Implement CEO Pay Ratio Disclosure Requirement

September 20, 2013

The SEC has proposed rules to implement the CEO pay ratio disclosure requirement of the Dodd-Frank Act. Our latest Thoughtful Pay Alert offers our preliminary observations on the proposed rules.

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Executive Pay Disclosure Trends of Emerging Growth Companies

May 3, 2013

Under the JOBS Act, newly public companies that qualify as “emerging growth companies” are eligible for certain reduced disclosure and corporate governance requirements concerning their executive compensation practices in their SEC filings. Compensia has reviewed the SEC filings of technology and life sciences companies that went public in 2012 and were eligible for emerging growth company status to determine how many of these companies took advantage of these streamlined requirements.

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Companies Should Verify Data For ISS "QuickScore" by February 15

February 4, 2013

Institutional Shareholder Services, the major proxy advisory firm, has rebranded its Governance Risk Indicators (“GRId”) tool as “ISS Governance QuickScore.” This tool, which assesses a company’s potential governance risks in four key areas – shareholder rights, compensation, audit practices, and board structure – will go into effect in a few weeks. In advance of its introduction, ISS is giving companies until February 18th to verify their data in the QuickScore database.

For more information on this process, please see our Thoughtful Pay Alert »

Equilar Provides Opportunity to Update Peer Group Used in Glass-Lewis SOP Analysis

January 7, 2013

Equilar is inviting certain companies to submit updated information about their self-constructed compensation peer groups by January 18, 2013 to ensure that Glass-Lewis & Co. is using the most relevant data when conducting its pay-for-performance analysis in connection with their 2013 Annual Meeting of Shareholders.

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ISS Issues 2013 Policy Updates

December 5, 2012

Institutional Shareholder Services, the corporate governance advisory services firm, recently updated the policies that it will use in 2013 to make voting recommendations for its institutional investor clients on “Say on Pay” shareholder votes, director elections, and equity plan proposals. These updates concern ISS’ “pay for performance” analytics, as well as its evaluation of “golden parachute” shareholder advisory votes and Board of Directors’ oversight of pledging and hedging practices by a company’s executives.

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ISS Releases Guidance on Revised Peer Group Selection Methodology

December 5, 2012

ISS is inviting certain companies to submit updated information about their self-constructed compensation peer groups by mid-December to ensure that ISS is using the most relevant data when conducting its pay-for-performance evaluation in connection with their 2013 Annual Meeting of Shareholders.

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Employee Stock Plan Proposals at the Bay Area 150

December 4, 2012

The results are in on the employee stock plan proposals submitted for shareholder action by the Bay Area 150 during the 2012 proxy season. Here’s our summary of the proposals and the voting results from these proposals.

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New Form of Say-on-Pay Litigation Appears

November 19, 2012

In recent months, a new type of lawsuit has begun to appear, seeking to enjoin companies from conducting the shareholder advisory vote on the compensation of their named executive officers on the basis of inadequate executive compensation disclosure. Our latest Thoughtful Pay Alert summarizes what we know about these suits.

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National Exchanges Propose Rules for Compensation Committees

October 18, 2012

As directed by the SEC, the national securities exchanges have proposed changes to their listing standards to strengthen the independence of board compensation committees and ensure the independence of compensation consultants, legal counsel, and other advisors to the compensation .committee. Our latest Thoughtful Pay Alert summarizes these proposed changes and offers some initial recommendations for complying with the revised listing standards.

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"Say on Pay" at the Bay Area 150 – An Updated Look at Year Two

October 17, 2012

As directed by the SEC, the national securities exchanges have proposed changes to their listing standards to strengthen the independence of board compensation committees and ensure the independence of compensation consultants, legal counsel, and other advisors to the compensation .committee. Our latest Thoughtful Pay Alert summarizes these proposed changes and offers some initial recommendations for complying with the revised listing standards.

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ISS Previews 2013 Policy Updates

October 18, 2012

Institutional Shareholder Services, the corporate governance advisory services firm, recently published for comment its proposed updates to the policies that it will use in 2013 to make voting recommendations for its institutional investor clients on “Say on Pay” shareholder votes, director elections, and equity plan proposals. These proposed updates concern ISS’ “pay for performance” analytics, as well as its evaluation of “golden parachute” shareholder advisory votes and Board of Directors’ responses to a shareholder proposal that received majority support in the previous year.

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Compensation Recovery ("Clawback") Provisions – Becoming Familiar with the Looming Requirement

September 7, 2012

With compensation recovery ("clawback") policies soon to be required by the Dodd-Frank Act for exchange-listed companies, we offer our observations on designing a new policy or updating an existing policy in the current environment.

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SEC Issues Final Rules for Compensation Committee and Adviser Independence Standards

July 9, 2012

The SEC has adopted final rules under Section 952 of the Dodd-Frank Act directing the national securities exchanges to modify their listing standards to implement the independence requirements of the statute.

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"Say on Pay" at the Bay Area 150 – A First Look at Year Two

July 6, 2012

Our latest Thoughtful Pay Alert examines the results of the 2012 Say-on-Pay votes conducted by the companies in the Bay Area 150.

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Newly-Public Companies and the ISS "Pay for Performance" Analysis

June 28, 2012

While the "pay for performance" methodology employed by Institutional Shareholder Services when formulating its Say-on-Pay vote recommendation has presented challenges for many companies, its use is particularly problematic when applied to newly-public companies holding their initial annual meeting of shareholders following their IPO. Our latest Thoughtful Pay Alert examines how ISS is conducting its "pay for performance" analysis on newly-public companies, as well as the new category of "emerging growth companies" created by the JOBS Act.

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Executive Long Term Incentives

May 10, 2012

In response to the increased emphasis on performance-based long-term incentives, our latest Thoughtful Pay Alert examines the different equity vehicles being used by technology and life sciences companies, including the increasingly popular market stock units.

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ISS Previews 2012 Policy Updates

October 27, 2011

Institutional Shareholder Services, the corporate governance advisory services firm, recently published for comment some of the proposed updates to the policies that it will use in 2012 to make voting recommendations for its institutional investor clients on “Say on Pay” shareholder votes, director elections, and equity plan proposals. These proposed updates concern ISS’ “pay for performance” analytics, as well as its evaluation of Board of Directors’ responses to the results of its initial “Say on Pay”-related votes.

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Employee Stock Plan Proposals at the Bay Area 150

September 14, 2011

The results are in on the employee stock plan proposals submitted for shareholder action by the Bay Area 150 during the 2011 proxy season. Here’s our summary of the proposals and the voting results from these proposals.

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Court Strikes Down SEC “Proxy Access” Rule

July 25, 2011

The United States Court of Appeals has vacated the SEC’s new “proxy access” rule, thereby virtually ensuring that proxy access will not be in place for the 2012 proxy season.

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"Say on Pay" at the Bay Area 150: A Mid-Year Report

July 14, 2011

As the 2011 proxy season winds down, we have compiled the results from the two new shareholder advisory votes required by the Dodd-Frank Act – the advisory vote on executive compensation ("Say on Pay") and the advisory vote on the frequency of future Say on Pay" votes – for the 150 largest high-technology and life sciences companies headquartered in the San Francisco Bay Area (the "Bay Area 150").

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SEC Initiates Rulemaking for Compensation Committee/Committee Adviser Independence Standards

April 5, 2011

The SEC has proposed rules that would implement the compensation committee and committee adviser independence requirements of Section 952 of the Dodd-Frank. The SEC has until July 16, 2011 to direct the national securities exchanges to begin the process of modifying their rules to prohibit the listing of any company that does not comply with these requirements.

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SEC Adopts "Say on Pay" Rules

February 3, 2011

The SEC has adopted final rules implementing the shareholder advisory vote ("Say-on-Pay") requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This Thoughtful Pay Alert summarizes the key aspects of these new rules.

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ISS Updates Burn Rate Tables for 2011 Proxy Season

January 5, 2011

ISS has updated its "burn rate" tables, which govern its voting recommendations on equity plan proposals, for 2011. Our latest Thoughtful Pay Alert highlights these updates, which provide significant increases in the burn rate levels for technology and life sciences companies, as well as several new "Frequently Asked Questions" which explain various aspects of ISS' 2011 U.S. compensation policies.

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ISS Issues Policy Updates for 2011

December 1, 2010

Institutional Shareholder Services, the corporate governance advisory services firm, recently published updates to the policies that it will use in 2011 to make voting recommendations for its institutional investor clients on "Say on Pay" shareholder votes, director elections, and equity plan proposals. This year's updates, which apply to shareholder meetings held on or after February 1, 2011, affect policies involving the "Say on Pay" frequency vote, the "Say on Pay" vote on golden parachute compensation, annual burn rate limits, and "problematic" pay practices.

To assist our clients in shaping their executive compensation programs and proxy disclosures for 2011, we offer our analysis of how these revised policies are likely to affect your compensation planning in the next year.

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SEC Proposes "Say on Pay" Rules

October 25, 2010

The SEC has proposed rules to implement the various "Say on Pay" votes required by the Dodd-Frank Act that go into effect for annual meetings of shareholders occurring on or after January 21, 2011.

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Preparing Your Executive Compensation Disclosure for Say on Pay

October 14, 2010

With most companies beginning to prepare for the initial shareholder advisory vote on their executive compensation program in 2011, we offer some suggestions for how to improve your executive compensation disclosure to maximize your chances for a favorable vote.

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SEC Adopts Final "Proxy Access" Rules

September 20, 2010

The SEC has published its schedule for proposing and adopting rules to implement the executive compensation provisions of the Dodd-Frank Act.

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SEC Adopts Final "Proxy Access" Rules

August 26, 2010

After a contentious multi-year debate, the SEC has adopted rules that will enable long-term significant shareholders to nominate candidates to serve on a company's board of directors using the company's proxy materials. This Thoughtful Pay Alert summarizes the new rules, which will take effect later this year.

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The Dodd-Frank Act Executive Compensation Provisions – What You Should be Doing Now

August 25, 2010

Over the next several months, companies will need to begin complying with the new executive compensation and corporate governance provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This Thoughtful Pay Alert summarizes each of these provisions, predicts their likely effective dates, and describes the action items that companies should beginning considering to prepare themselves for the new requirements.

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Dodd-Frank Bill Signed into Law

July 21, 2010

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. The new law contains a number of provisions affecting executive compensation and corporate governance, including mandatory shareholder advisory votes on executive compensation programs and golden parachutes, a compensation recovery ("clawback") requirement, new executive pay disclosure requirements, and proxy access. This Thoughtful Pay Alert sets out the effective dates for the new executive compensation and corporate governance provisions and includes a link to our recent Thoughtful Pay Alert describing the provisions and some initial action items.

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Congress Agrees on Executive Compensation Reforms

June 28, 2010

On June 25, 2010, Congress reached agreement on the final version of its financial services reform bill. The proposed legislation, entitled the Dodd-Frank Wall Street Reform and Consumer Protection Act, contains a number of provisions affecting executive compensation and corporate governance.

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Risky Business – A Review of the 2010 Bay Area 150 Pay Risk Disclosures

June 11, 2010

We have summarized the results of our review of the initial compensation-related risk disclosures of the Bay Area 150. Although none of the companies we reviewed made mandatory disclosures, most provided some voluntary disclosure about their compensation risk assessments.

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Comparing the Executive Compensation Reform Proposals – An Update

May 26, 2010

Following the Senate’s recent approval of the “Restoring American Financial Stability Act of 2010,” this article updates our previous article comparing the executive compensation and corporate governance provisions in both the House and Senate versions of the financial services reform legislation currently pending before Congress.

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Read the original article from March 2010 »

Dissecting GRId

May 24, 2010

RiskMetrics’ new risk assessment tool, Governance Risk Indicators (or GRId), is intended to help investors evaluate its portfolio companies’ governance-related risks. We have reviewed the technical materials that underlie the GRId methodology and offer our initial observations on how GRId is applied to a company’s compensation policies and practices.

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10 Tips for Navigating the ISS Equity Plan Maze

May 24, 2010

One of the biggest challenges that companies face when implementing a new employee stock plan is running the gauntlet of the RiskMetrics” (or, more precisely, its Institutional Shareholder Services division’s) burn rate and dilution tests. This article offers 10 tips for avoiding an unfavorable vote recommendation.

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RiskMetrics Introduces New Corporate Governance Tool

February 23, 2010

RiskMetrics has launched a new tool, Governance Risk Indicators, or GRId, to assess the corporate governance and compensation-related risks at public companies. GRId replaces the existing CGQ system for rating corporate governance practices.

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Conducting a Risk Assessment

January 6, 2010

Public companies will need to review the risk profile of their compensation programs to satisfy the SEC’s new risk disclosure requirement. Here’s what’s involved in conducting this risk assessment.

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10 Tips for Enhancing Your 2010 Executive Compensation Disclosure

January 6, 2010

Here is our annual list of tips for preparing your executive and director compensation disclosure in your 2010 proxy statement.

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Executive Compensation in 2010 – What Lies Ahead

January 6, 2010

A number of regulatory changes, as well as pending federal legislative initiatives, are poised to have a dramatic impact on executive compensation practices in 2010.

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SEC Adopts Disclosure Enhancements in Time for 2010 Proxy Season

December 16, 2009

The SEC has adopted changes to its proxy disclosure rules for 2010 that provide investors with additional information about how companies assess the risks in their compensation programs and other corporate governance and compensation-related matters.

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RiskMetrics Issues Policy Updates for 2010 Proxy Season

December 4, 2009

RiskMetrics Group (the parent company of Institutional Shareholder Services (ISS) has updated its U.S. corporate governance policies for the 2010 proxy season, including several policies that affect executive and equity compensation matters.

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Compensation Consultant Conflicts in the Spotlight in 2010

September 18, 2009

Pending new rules requiring companies to disclose the fees paid to compensation consultants will force compensation committees to identify and explain the non-compensation-related services that these advisors provide.

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The SEC’s New Disclosure Proposals

July 27, 2009

The SEC is proposing changes to its proxy disclosure rules to provide investors with additional information about how companies assess the risks in their compensation programs and other corporate governance-related matters.

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Shareholder Advisory Votes on Executive Compensation – A “Say on Pay” Primer

June 12, 2009

The Administration’s announcement that it intends to proposed legislation that would give shareholders an annual advisory vote on executive compensation at all public companies is just the latest indication that Say on Pay may be required during the 2010 proxy season. Here’s a summary of the origin and recent experiences with advisory votes on executive pay to help you get up-to-speed on this significant development.

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Director Accountability in the Spotlight

June 12, 2009

Two pending corporate governance initiatives – a majority voting standard for the election of directors and a rule permitting large shareholders to nominate their own director candidates using the company’s proxy materials – are poised to dramatically alter director accountability for their actions and decisions, including those involving executive compensation.

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A Stock Option Exchange Update—Shareholder-Approved Exchanges

March 3, 2009

Here’s the latest information on companies that have sought shareholder approval for their stock option exchange program—a condition precedent that many companies must satisfy before conducting an exchange.

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Enhancing Your 2009 Executive Compensation Disclosure

January 5, 2009

With proxy season just a few short weeks away, here are 10 tips to help ensure that your pay disclosure is complete and effective.

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RiskMetrics Issues Policy Updates for 2009 Proxy Season

December 9, 2008

RiskMetrics Group (the parent company of Institutional Shareholder Services (ISS)) has updated its U.S. corporate governance policies for the 2009 proxy season, including several policies that affect executive and equity compensation matters.

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Treasury’s New Executive Compensation Standards—A Preview of Things to Come?

October 29, 2008

The Emergency Economic Stabilization Act of 2008 imposes significant executive compensation and corporate governance standards on financial institutions that participate in the government’s Troubled Assets Relief Program. Here’s a summary of these new standards, and our assessment of the impact that they are likely to have on other companies in the months ahead.

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10 Questions (and Answers) About Say on Pay

April 30, 2008

As activist shareholders step up their efforts to get companies to implement advisory votes on executive compensation, here’s what you need to know about Say on Pay.

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Enhancing Your 2008 Executive Compensation Disclosure

February 15, 2008

Here are 10 tips to help you make an effective presentation of your executive and director compensation information in this year’s proxy statement.

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ISS Issues Policy Updates for 2008 Proxy Season

ISS Governance Services (formerly Institutional Investor Services, and now a part of RiskMetrics Group) has updated its U.S. corporate governance policies for the 2008 proxy season, including several policies that affect executive and equity compensation matters.

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ISS Proposes Executive Pay Disclosure Best Practices

RiskMetrics, Inc. (the former Institutional Shareholder Services) is the first major shareholder advisory firm to publicly disclose its reaction to the first proxy season under the SEC’s new executive compensation disclosure rules, and to propose for discussion a set of disclosure best practices to guide future filings.

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SEC Offers Guidance for 2008 Executive Pay Disclosure

The SEC’s Division of Corporation Finance has issued its long-anticipated report summarizing its observations on the first proxy season under the Commission’s new executive compensation disclosure rules. Companies should find the report to be helpful in preparing their upcoming Compensation Discussion and Analysis and related tabular disclosure.

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Stock Option Vesting Acceleration Increases in Advance of SFAS 123R

A look at key parameters and current market trends, as companies who have not taken action in the past to restructure their underwater options face the prospect of recognizing an expense for awards that may unlikely provide any value to employees.

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Deferred Compensation Update

A summary of the more important issues covered by the IRS's Notice 2005-1 on the new IRC Section 409A.

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The JOBS Act and Executive Compensation

April 10, 2012

The recently-enacted JOBS Act contains several provisions that impact the executive compensation disclosure and compliance requirements of newly-public companies. In addition, the Act also makes it easier for privately-held companies to provide broad-based equity awards without risking inadvertent public company reporting status.

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10 Tips for Enhancing Your 2012 Executive Compensation Disclosure

January 19, 2012

Here is our annual list of tips for preparing your executive and director compensation disclosure in your 2012 proxy statement

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ISS Issues 2012 Policy Updates

Novemer 30, 2011

Institutional Shareholder Services, the corporate governance advisory services firm, has published updates to its Benchmark U.S. Corporate Governance Policies for 2012. These are the guidelines that it will use during the 2012 proxy season to make voting recommendations for its institutional investor clients on “Say on Pay” shareholder votes, director elections, and equity plan proposals. These updates cover significant revisions to ISS’ “pay for performance” analytics, as well as its evaluation of Board of Directors’ responses to the results of its initial “Say on Pay”-related votes.

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Thoughtful Pay Practices Archive

Dealing with Performance-Based Equity Awards upon a Change in Control

November 12, 2008

Implementing a performance-based equity plan raises several challenging issues. One that is often overlooked is the potential disposition of awards in the event that the granting company is acquired during the performance period. This article summarizes the various approaches that are used to address the treatment of awards upon a change in control and evaluates their relative strengths and weaknesses.

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Expecting the Unexpected – Preparing Your Change in Control Program for an Unsolicited Takeover Bid

October 28, 2008

With the recent volatility in the equities market, the stock prices at many technology and life sciences companies are at or near all-time lows; making them attractive targets for an unsolicited takeover bid. Here’s a process for evaluating whether your change-in-control program is meeting your objectives in this uncertain environment.

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Implementing an Option Exchange Program – How To Decide Whether It’s Right for You

October 21, 2008

Many companies are facing significant levels of underwater stock options due to the recent volatility in the stock market. We offer a roadmap for evaluating whether an option exchange program is the best response to this unsettling development.

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Is Your Compensation Committee’s Outside Advisor Independent?

Much has been written about the need for boards and compensation committees to seek advice from outside advisors who are independent of management. For example, the NACD Blue Ribbon Commission on Executive Compensation and the Role of the Compensation Committee suggests that compensation committees consider engaging an independent compensation consultant who is hired by and who reports directly to the committee and who has not been retained by the company in any other capacity. The failure to use outside advisors was cited in both the complaints filed against Cendant and Disney (re: Executive Compensation) as further evidence of the compensation committee’s failing.

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Should Outside Advisors Attend Executive Sessions of the Compensation Committee?

Both Nasdaq and NYSE rules require Boards to regularly schedule executive sessions. Nasdaq requires that the executive sessions consist of “independent directors” only, while the NYSE rules require separate meetings of all outside directors, whether or not they are independent.

Many companies extend this practice to Board committees, including the compensation committee. Giving the company’s outside directors an opportunity to candidly review and discuss potentially sensitive matters such as CEO pay and performance and other elements of executive pay without management in attendance can lead to effective and thoughtful deliberation and oversight.

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Section 162(m) Compliance

2004

Late in 2003, the IRS announced a pilot audit initiative focused on executive compensation. Among other things, the audit initiative focuses on compliance with the Section 162(m) deduction limit. Section 162(m) limits the corporate tax deduction for non-“performance-based” compensation paid to top executives of publicly-held corporations (“covered employees”) to no more than $1,000,000 per executive per year.

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Inadvertent Section 162(m) Violations

2004

Compensation Committees may not be aware that certain elements of their company’s executive compensation program are not fully deductible. As a result, Compensation Committees may be making executive compensation decisions without taking the full cost of those decisions into account.

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Assessing the Independence of the Compensation Committee’s Outside Advisors

2004

Much has been written about the need for Boards and Compensation Committees to seek advice from outside advisors who are independent of management. For example, the NACD Blue Ribbon Commission on Executive Compensation and the Role of the Compensation Committee suggests that Compensation Committees consider engaging an independent compensation consultant who is hired by and who reports directly to the Compensation Committee and who has not been retained by the Company in any other capacity. The failure to use outside advisors was cited in both the Cendant and Disney complaints as further evidence of the Compensation Committee’s failing.

Download a pdf of this article »

Should Outside Advisors Attend Executive Sessions of the Compensation Committee?

2004

Both Nasdaq and NYSE rules require Boards to regularly schedule executive sessions. Nasdaq requires that the executive sessions consist of “independent directors” only, while the NYSE rules require separate meetings of all outside directors, whether or not they are independent.

Download a pdf of this article »

Other Publications Archive

The TARP Executive Compensation Standards – A Sign of Things to Come? by Compensia Principal, Mark Borges

Executive compensation guidance for TARP participants issued by Treasury in June to implement congressional acts expands the number of covered employees, imposes stricter limits on certain compensation payments, and adds new corporate governance requirements. Compensia Principal, Mark Borges, reviews these developments and suggests that certain of them are likely to become general practice in the corporate community.

(from the September 9, 2009 issue of The Review of Securities and Commodities Regulation)

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The Need for a Principled Approach to Compensation Reform

(from the August 7, 2009 issue of BNA’s Corporate Accountability Report)

A group of corporate governance and executive compensation experts, including Compensia’s Mark A. Borges, offer their thoughts as to how Congress should approach executive compensation reform in the current environment.

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Compensia Announcement: Compensia Expands to Los Angeles as Matt Quarles Joins Firm.

July 2009

Matt Quarles joined the firm as a Senior Consultant resident in Los Angeles effective July 1, 2009. Matt, who has 10 years experience as a consultant advising Board compensation committees and senior management on executive pay and equity compensation matters was formerly with Watson Wyatt.

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Surveys Archive

2009 Bay Area 150 Reports

October 2009

Compensia, Inc. is pleased to release its third annual Bay Area 150 reports (previously the Silicon Valley 135 reports), a comprehensive study analyzing the senior executive compensation policies and practices of Silicon Valley’s largest high-technology companies. As reflected in this year’s study (which expands the number of companies examined from last year’s 135 to this year’s 150), the pay practices of the country’s largest technology and life sciences firms reflect a distinctive approach to the use of annual and long-term incentives to attract, retain, and motivate the executives that drive the growth and innovation in one of the United States most dynamic business sectors.

These analyses are based upon a review of the companies’ executive and director compensation information as disclosed in the proxy statements and other public filings with the Securities and Exchange Commission from fall 2008 and winter and spring 2009, and cover the most recent fiscal year reported by each company.

The initial report looks at the current executive compensation practices of these companies as reported for their chief executive officer, chief financial officer, and three other most highly-compensated executive officers as of fiscal year-end. The second report addresses the use of equity compensation by these companies in their executive compensation programs. The third report examines how the companies compensated the members of their boards of directors during the past fiscal year.

For additional information or reprint permission, please contact Michael Benkowitz at mbenkowitz@compensia.com or Anna-Lisa Espinoza at alespinoza@compensia.com.

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Compensia Continues to Lead Bay Area Compensation Committee Consulting Engagements

August 2009

A recent survey of the top 150 public technology and life sciences companies in the Bay Area shows that, for the second consecutive year, Compensia was the advisor to nearly one-third of the companies’ Board Compensation Committees disclosing that they had engaged a compensation consultant—twice the next most frequently identified consultant.

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Update on Pre-IPO Pay Practices

March 2009

Continuing its survey of pre-IPO companies in the current down economy, Compensia has updated its information on the measures that these companies are taking to manage (and reduce) their compensation-related costs, including base salary, annual incentives, and equity awards.

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Report on Pre-IPO Pay Practices

December 2008

In response to the recent economic downturn, Compensia, Inc. has surveyed over three dozen pre-IPO companies to determine what measures they are taking to manage (and reduce) their compensation-related costs, including base salary, annual incentives, and equity awards, in the current environment.

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2008 Silicon Valley 135 Reports

October 2008

Compensia, Inc. is pleased to release its second annual Silicon Valley 135 reports, a comprehensive study analyzing the senior executive compensation policies and practices of Silicon Valley’s largest high-technology companies. As reflected in this year’s study (which expands the number of companies examined from last year’s 130 to this year’s 135), the pay practices of the country’s largest technology firms reflect a distinctive approach to the use of annual and long-term incentives to attract, retain, and motivate the executives that drive the growth and innovation in one of the United States most dynamic business sectors.

These analyses are based upon a review of the companies’ executive and director compensation information as disclosed in the proxy statements and other public filings with the Securities and Exchange Commission from fall 2007 and winter and spring 2008, and cover the most recent fiscal year reported by each company.

The initial report, which was published on October 7, 2008, looks at the current executive compensation practices of these companies as reported for their chief executive officer, chief financial officer, and three other most highly-compensated executive officers as of fiscal year-end. The second report, which was published on October 14, 2008, addresses the use of equity compensation by these companies in their executive compensation programs. The third report, issued October 21, 2008, examines how the companies compensated the members of their boards of directors during the past fiscal year.

For additional information or reprint permission, please contact Michael Benkowitz at mbenkowitz@compensia.com or Anna-Lisa Espinoza at alespinoza@compensia.com.

Download Executive Compensation Practices »
Download Equity Compensation Practices »
Download Board of Directors Compensation Practices »

The Silicon Valley 135: Advising the Compensation Committee

August 2008

Compensia continuously monitors the executive compensation practices of the largest 135 high-technology and life sciences companies with headquarters in the Silicon Valley (a group that we call the Silicon Valley 135).

Since 2007, companies have been required to identify any advisors that have a role in determining or recommending the amount or form of their executive and director compensation. A recent survey of the Silicon Valley 135 found that Compensia was the advisor to over one-quarter of the Board Compensation Committees that indicated that they had engaged an advisor (30 companies).

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Compensia’s 2007 Silicon Valley 130 Reports

October 2007

Compensia’s Silicon Valley 130 Reports analyze the senior executive compensation policies and practices of Silicon Valley’s largest high-technology companies during the fall of 2006 and winter and spring of 2007.

Download Executive Compensation Practices »
Download Equity Compensation Practices »
Download Board of Directors Compensation Practices »

Thoughtful Pay Survey: Corporate Governance and the Compensation Committee

May 2005

Download a pdf of the Thoughtful Pay Survey, May 2005 »


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