Upcoming Incentive Stock Options and Employee Stock Purchase Plan Reporting and Disclosure Requirements

At the beginning of each year, Section 6039 of the U.S. Internal Revenue Code requires companies to comply with Internal Revenue Service (IRS) reporting and disclosure requirements relating to the exercise of incentive stock options (ISOs) and the transfer of stock purchased at a discount under a tax-qualified employee stock purchase plan (ESPP). READ MORE

Reporting Deferred Compensation on Form 990

Tax-exempt organizations often provide deferred compensation to their officers, key employees, and most highly compensated employees. Like current compensation payable to such employees, deferred compensation must be reported annually on Form 990, Schedule J. For the most part, Schedule J is straightforward. However, it is not always obvious how to apply the rules for reporting deferred compensation. This blog post describes the rules and gives an illustrative example. READ MORE

Directors’ 2020 Compensation Higher Than Expected

Total expected compensation for outside corporate directors continued to rise in 2020, while boards navigated a near-term pandemic response and planned for the longer-term realities.

Willis Towers Watson’s Global Executive Compensation Analysis Team completed its annual year-over-year comparison of S&P 500 director pay program results, contrasting 2020 proxy data against that of 2019. The analysis of nonemployee director compensation looks at an expected level of pay for a median outside director as of fiscal year-end 2019 and 2018, which includes forward-looking pay level adjustments disclosed for 2020 and 2019 but does not include any potential disclosed impact due to COVID-19. READ MORE

Apple adds ESG bonus component to executive compensation program

In its recently filed proxy statement, Apple Inc. announced that beginning in 2021, the Compensation Committee will incorporate an environmental, social and governance modifier into the annual cash incentive program. The Compensation Committee will use the modifier to determine whether to increase or decrease bonus payouts by up to 10% based on the Compensation Committee’s evaluation of executives’ performance with respect to “Apple Values” and other key community initiatives during 2021. READ MORE

COVID-19 vaccine, deferred care are top comp, benefits concerns for 2021

Prior to 2020, HR industry observers speculated about the end of a U.S. talent market that had experienced 10 years of increased job gains. In addition to competitive pay, some employers experimented with new and innovative benefits covering areas such as student loan forgiveness, fertility and same-day pay.

The past year's turbulence is likely to disrupt compensation and benefits in several ways. A Gallagher survey published in November, for example, showed that the pandemic disrupted planned 2021 salary increases at 45% of employers surveyed, with 51% saying they expected to reduce salary increases. READ MORE

Vaccine Incentives: How Employers Can Encourage Employee Vaccination

As COVID-19 vaccines become available to broader groups during winter and spring 2021, employers are considering how they can encourage employees to get vaccinated. While the Equal Employment Opportunity Commission (EEOC) has stated that employers may require that employees get vaccinated, as long as they address accommodation issues, (see our alert on that guidance here), most employers have not yet indicated that they will mandate vaccines. Instead, many employers are exploring alternatives – at least at this stage – to encourage vaccination when it becomes available to employees. READ MORE

Section 162(m) Final Regulations Clarify Grandfathering Rules to Compensation Payable under Account Balance and Nonaccount Balance Nonqualified Plans

Pubic companies that sponsor nonqualified deferred compensation plans with grandfathered benefits will want to be aware of helpful payment guidance in the Internal Revenue Code Section 162(m) final regulations. The final regulations, which were published in the Federal Register on December 30, 2020, implement amendments made to Section 162(m) by the Tax Cuts and Jobs Act (TCJA). The regulations adopt the Section 162(m) proposed regulations issued on December 20, 2019, with certain modifications. READ MORE

How the Low Minimum Wage Helps Rich Companies

The country’s very low minimum wage comes at a high cost. And for taxpayers, it adds up to more than $100 billion a year.

That number comes from a new analysis of safety-net usage by Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary of UC Berkeley’s Labor Center. It identifies working families with at least one member who would get a raise if the federal minimum wage were lifted to $15 an hour, and finds that the government spends about $107 billion a year on Medicaid, the Children’s Health Insurance Program (CHIP), cash welfare, food stamps, and the earned-income tax credit for those families. READ MORE

Well Done? EEOC's New Proposed Rules Would Limit Employer Wellness Programs to De Minimis Incentives—with Significant Exceptions

On 7 January 2021, the U.S. Equal Employment Opportunity Commission (EEOC) proposed two new rules designed to clarify the scope of incentives that employers may offer employees as part of a wellness program without violating the Americans with Disabilities Act (ADA) or Genetic Information Nondiscrimination Act (GINA). READ MORE

Final Regulations on Exempt Organization Excess Compensation Excise Tax

On Monday, January 11, Treasury and the IRS released final regulations under section 4960. Section 4960, enacted as part of the Tax Cuts and Jobs Act (TCJA), imposes an excise tax on remuneration in excess of $1 million and any excess parachute payment paid by an applicable tax-exempt organization (ATEO) to any covered employee. The excise tax and the final regulations can affect not only ATEOs, but also certain entities that are treated as related to those organizations. READ MORE

Covid has made performance evaluations simpler, more empathetic

Count performance evaluations among workplace practices changed by the Covid-19 pandemic, and some of those modifications are expected to stick around.

With millions still working remotely, Gartner polls from 2020 found most organizations are tweaking evaluations rather than canceling them entirely amid the pandemic, The Wall Street Journal reports. Many business leaders are approaching performance reviews with more empathy and flexibility, even as more than half of executives said employee performance was a top concern in 2020. READ MORE