Marissa Mayer has millions of reasons to celebrate her job at Yahoo. The CEO's future may be in question, but she's already earned over $100 million in reported compensation from the search giant over the past four years at the helm. (And that doesn't include the $55 million she's due if she steps down.)

But is "earned" the right word? Verizon's purchase of Yahoo offers a good opportunity to see how Mayer's tenure as CEO compared on a pay-for-performance basis to past Yahoo chiefs. Read More

A group of business leaders this week signed an open letter calling for reforms in how publicly-traded companies are run. JPMorgan Asset Management CEO Mary Callahan Erdoes weighed in on the key principles the group is rallying behind.

“This all started with the heightened debate around short-termism, and short-termism really goes against the grain of what all Americans are looking for…. when they think about investing their profits, their savings for the future so that they can have a proper nest egg for retirement,” Erdoes told the FOX Business Network’s Maria Bartiromo. Read More

In a comment letter to six federal financial regulatory agencies today, ABA raised numerous concerns about the agencies’ proposed incentive-based compensation rule. Mandated by the Dodd-Frank Act, the proposed rule would prohibit incentive-based compensation arrangements for executives that the regulators believe could encourage excessive risk-taking behavior.

The proposed rule would apply to banks with more than $1 billion in assets, dividing banks into three “tiers” based on asset size, with the largest banks subject to the most stringent requirements. Banks with more than $50 billion in assets would be required to defer a percentage of qualifying incentive-based compensation for executives and significant risk takers for a specified amount of time. Regulators would have discretion over requirements for firms with less than $50 billion in assets. Read More

The Securities and Exchange Commission’s recent flurry of regulatory activities shows progress with the agency’s evaluation of disclosure requirements. As part of a larger regulatory revamp of Regulation S-K and related filings, the SEC proposes to eliminate the now obsolete disclosure requirements regarding equity compensation plans.

Regulation S-K governs the disclosure requirements for various SEC filings by public companies. The SEC issued proposed rules to amend Regulation S-K on Jul. 13, including a demonstration version of the proposed amendments, which provides nearly 200-pages of proposed additions and deletions to the Regulations. A concept release soliciting comments from the public was previously issued on Apr. 13. Read More

Although defined contribution (DC) plans are the most popular way for employees to store up money for retirement, savings in these plans is severely limited for high-earning executives, notes Marc McDonough, vice president of Schwab Stock Plan Services in Denver. Due to statutory limits on defined contribution plan deferrals, “an executive making $250,000 can put only about 7% of compensation in a DC plan,” he says.

Corporations use equity compensation plans—granting company stock to employees or giving them the option to purchase company stock—to attract and retain the best talent. Whether it is to fill in the retirement savings gap or increase overall financial well-being, these plans are a big driver for attracting executives, who see them as an opportunity to save more than they can in a defined contribution plan, McDonough says. Read More

Deferred compensation plans can be a tremendous tax saver but when things don't go as planned, they can cause greater taxation to increase substantially.

Q. I've been participating in my company's deferred-compensation plan. "Unfortunately" my company was just sold and all funds from my deferred-compensation plan have been paid out as income in a lump sum (so much for distributions dragged out over years in a lower tax bracket). I'm a bit miffed for two reasons: 1) I'm worried that this and other income garnered from my company's sale will put me in a higher tax bracket such that had I never participated in the deferred-compensation plan I'd have been better off (understanding hindsight and all) and 2) I moved to GA a year ago, but prior to that I lived in FL where the majority of my deferred compensation was earned. Since I was paid out in GA, state taxes were withheld from the full amount. Do I have to pay GA state tax on my FL deferred income (at least the basis amount)? Thanks, BeckyRead More

Our May 26, 2016 article, Reasonable Compensation Issues Remain on the IRS Radar ("Part I"), discussed how the IRS scrutinizes the reasonableness of compensation payments made to C-corporation shareholder-employees. As indicated in Part I, when a C-corporation is involved, the IRS often argues that the compensation is unreasonably high and paid to avoid the double tax on corporate profits. However, the IRS also challenges compensation payments made to S-corporation shareholder-employees. As discussed below, when an S-corporation is involved, there is a risk the IRS will take the opposite approach and argue that the compensation is unreasonably low.

Income Tax Issue

Unlike a C-corporation, an S-corporation's earnings are not typically subject to double tax because its earnings are not taxed at the corporate level. Instead, the S-corporation's earnings "pass through" to the shareholders and are taxed at the shareholder level regardless of whether the earnings are actually distributed to the shareholders (for ease of reference, the distribution of earnings will be referred to in this article as "dividends"). The shareholders generally receive the dividends tax free because the shareholders have already paid tax on the earnings. Read More

ARLINGTON, Va., July 19, 2016 (GLOBE NEWSWIRE) -- Total pay for outside directors at the nation's largest corporations increased by a modest 3% in 2015, driven by increases in both cash and stock compensation, according to a new analysis by Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking and solutions company. The study also found the annual cash retainer for board service reached $100,000 for the first time as companies continue to push toward a fixed approach to director pay.