Winston’s Executive Compensation Blog features insights on the latest legislative, regulatory, case law, and practical developments concerning executive compensation. The posts focus on executive compensation and employee retirement benefit issues for corporations, boards of directors, executives, and fiduciaries.
We are in Houston for the annual NASPP and Proxy Disclosure Conferences, but I need to alert readers that last week, the SEC published five helpful Compliance & Disclosure Interpretations on the CEO Pay Ratio Disclosure that will be required for 2017. We have been urging you to begin the data collection process necessary for calculating the CEO Pay Ratio for 2017 as soon as possible (Data Collection for Calculating CEO Pay Ratio). Maybe this is the helpful clarification will spur on anyone left has not yet begun.
Nasdaq Clarifies Its Position on Stock Plan Amendments to Allow Greater Than Minimum Tax Withholding 10/20/16
As we have previously discussed, this year’s amendment of the accounting standards for stock based compensation—ASU 2016-09—allows for equity plans to withhold a participant’s shares of taxes related it his or her award up to the maximum individual tax rate in the applicable jurisdiction, rather than the just the minimum statutory withholding amount, without triggering liability accounting treatment. However, as we also have previously discussed, there should be some concern whether such an amendment to an equity plan would require shareholder approval.
Clarification on SEC’s Guidance for Company Stock Purchases Through a 401(k) Plan Brokerage 10/18/16
Last month, I wrote about some helpful guidance published by the SEC on the question of whether a company that does not offer a company stock fund investment option under its 401(k) Plan, but makes available a self-directed “brokerage window feature” that allows participants to direct the investment of their 401(k) Plan accounts among an almost limitless number of investment alternatives, including, potentially, company stock, must file a Form S-8. What I want to clarify is that the guidance the SEC published in new C&DI, Question 139.33, was consistent with the SEC staff's previously announced (and long-held) position on employee stock purchase plans (that is, broad purchase programs that are operated by a third party, rather than the company itself).
Since we have been focusing on Clawbacks for the last few blogs, I wanted to refer readers to a recently released study by Audit Analytics, showing that, in 2015, public companies filed a total of 737 restatement disclosures. (The quantity of restatement and non-reliance disclosures had peaked in 2006 with 1851 disclosures.) Does that mean 737 companies would have been required to claw back compensation in 2015? Fortunately not.