S Corporations May Face Tougher Tax Scrutiny

Tax authorities seem to have taken the first steps toward closing a reporting loophole for S corporations.

According to a government report, the Internal Revenue Service is selecting a tiny number of S corporations for examination to make sure they are complying with the payment of employment taxes. When the IRS does examine an S corp, many revenue agents don’t look closely enough at executive compensation, according to the agency that produced the report, the Treasury Inspector General for Tax Administration, which provides independent oversight of IRS activities. READ MORE

Employer's bonus structure didn't bar use of fluctuating workweek pay method

The 11th Circuit began its analysis by reviewing the fluctuating workweek method. The Fair Labor Standards Act requires employers to pay nonexempt employees time and a half their regular rate for all hours worked beyond 40. But some workers are paid a fixed salary — as opposed to an hourly rate — and work fluctuating hours. In this circumstance, employers can use the fluctuating workweek method to calculate overtime pay. READ MORE

Are CEOs Overpaid?

The issue of whether or not CEOs are overpaid has been debated for many years. The professionals in the CEO role are among the most prominent and influential people in any company. They have a huge responsibility, which is to manage and lead their employees to success. But should they be paid so much more than an average employee? The answer depends on who you ask!

Many people argue that CEOs deserve every penny of their salary because of the amount of work and time they put into their position. But, on the other hand, there’s also a large population that believes CEOs get paid far too much money for what they do, especially when compared to how much lower-level employees make. In this blog, we’ll walk through some interesting facts surrounding how we got here. Let’s begin! READ MORE

2022 Proxy Season: A Look Ahead to Executive Compensation Issues

Autumn’s chill has settled in, which means the 2022 proxy season is just around the corner. Given (1) the continuing impact of the COVID-19 pandemic and related supply chain issues and (2) the unprecedented interest in issues surrounding executive compensation, it is important to prepare early to avoid any unanticipated hitches and take advantage of opportunities to proactively address compensation matters through effective proxy disclosures, well-executed shareholder engagement, and informed compensation committee actions. READ MORE

Proposed Minimum Tax on Book Income Would Hit Stock-Based Compensation

One way employees can be compensated for their work, in addition to wages, salaries, and benefits, is through awards of company stock. The tax treatment of stock-based compensation has received attention for contributing to the gap between corporate taxable income and book income reported on financial statements, which President Biden has proposed targeting with a new minimum tax. It also adds to concerns over executive pay and income inequality.

Critics of stock compensation, however, neglect how it helps align incentives between employees and employers and the underlying rationale for how it is taxed. READ MORE

Oracle opposes Glass Lewis proposals on board, compensation

Oracle Corp. said it strongly disagreed with Glass Lewis & Co.’s proposals to vote against the election of Chief Executive Safra Catz, Board Director Vishal Sikka and members of the compensation committee at its annual shareholder meeting on Nov. 10, as well as the proxy adviser’s rejection of advisory approval of the company’s executive compensation plan.

Oracle said that it disagreed with the proxy adviser’s recommendation to withhold votes for Catz, stating that she is helpful in bringing knowledge of the company’s strategic vision, management and operations to the board. READ MORE

Do we even want to go back to pre-pandemic work conditions?

Not since 1942, when women flooded into the workplace in support of the war effort, have we seen a worker revolution such as we are experiencing now. A just-released Duke Fuqua School of Business global survey of Chief Financial Officers reports job openings are at a 20-year high. Total employment today is 5 million below the pre-pandemic peak. How can this be explained in a growing economy?

Some voices say workers are just lazy and don’t want to work, reasoning that many are still living off the overly generous unemployment benefits they received. Others believe the continued fear of the pandemic is keeping some from returning to work. Both are wrong! READ MORE

6 myths women are told about the gender pay gap

It’s not the kind of date of festive holiday celebrations, but October 21 is momentous nonetheless. It’s the last Equal Pay Day of the year, this time dedicated to the additional 293 days the average Latina had to work in 2021 to earn the same pay a white, non-Hispanic man earned last year.

Unfortunately, we’ll be celebrating Equal Pay Days for at least another century, when Black and Hispanic women are estimated to finally catch up and close the gap — although the general estimate for all women is 2059. READ MORE

Does Raising the Minimum Wage Kill Jobs?

For decades it was conventional wisdom in the field of economics that a higher minimum wage results in fewer jobs.

In part, that’s because it’s based on the law of supply and demand, one of the most well-known ideas in economics. Despite it being called a “law,” it’s actually two theories that suggest if the price of something goes up – wages, for example—demand will fall—in this case, for workers. Meanwhile, their supply will rise. Thus an introduction of a high minimum wage would cause the supply of labor to exceed demand, resulting in unemployment. READ MORE

As Minimum Wages Rise, Prepare for Pay Compression Issues

ressure to increase wages for the lowest-paid employees, driven by the need to attract workers and to stay ahead of rising local, state and federal minimum wage mandates, is "a red-hot compensation topic right now," according to a panel of pay authorities who spoke at WorldatWork's 2021 Total Rewards Conference, held virtually in October.

Raising minimum pay levels can require revisiting pay ranges throughout the compensation structure, the panelists noted. As a related issue, many benefits costs, such as 401(k) matching contributions and incentive bonuses, are linked to employees' base pay and will become more expensive as wage rates trend higher. READ MORE

Five Themes Likely to Impact Executive Compensation in 2022

Executive compensation has become increasingly sensitive and is under heightened scrutiny. During the past two years the environment in which businesses operate has changed dramatically. The COVID-19 pandemic, rise of stakeholder capitalism, intensified talent mobility, regulatory changes and other external factors will continue to impact the governance of executive pay and performance programs.

So what should boards, remuneration/compensation committees and senior executives be thinking about to address these complexities? Willis Towers Watson’s research and consulting experience working with leading clients globally points to five themes that will likely impact executive compensation programs in 2022 and beyond. READ MORE

Should Remote Work Pay Be Based On Location?

For the past 12 years, Brian Hartvigsen has worked remotely from Boise, Idaho. Now an engineering director for the analytics platform ChartHop, he first began working remotely shortly out of college for OpenDNS in 2009.

At first, he didn’t realize that where he lived played a factor in his compensation. He figured he was doing a job and was going to be paid appropriately for that job. “A little naive on my part,” he said. READ MORE

Gender isn’t the problem during salary negotiation, researchers say. Here’s what’s to blame

It’s a common misconception women aren’t as skilled as men when it comes to salary negotiation. A new study out of the University of Southern California offers more evidence it’s a myth.

As they explored barriers to equitable pay in STEM fields, researchers determined neither gender excels when negotiating compensation. If women appear worse in real-world scenarios, they said, it can be chalked up to recruiters’ implicit biases. READ MORE

Sen. Bernie Sanders backs John Deere strike, citing CEO salary up 160% during pandemic

Senator Bernie Sanders, the unofficial leader of the progressive movement, has released a statement of support for 10,000 union workers at John Deere now on strike. Union members are demanding higher pay after the company reported a jump in profits, and executive salaries increased during the pandemic. Supporters say workers on the factories deserve a slice of the profit after staying on the job during the outbreak of COVID-19. READ MORE

SEC reopens Dodd-Frank Act comment component

Securities and Exchange Commission (SEC) officials said the agency has reopened the comment period regarding proposed rules addressing listing standards for erroneously awarded compensation recovery.

According to the SEC, interested parties will be able to submit additional comments and data related to rule amendments the SEC initially proposed in 2015, in addition to comments surrounding questions raised by the panel in its reopening release. READ MORE