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Bank of America Corp.’s top executives were sitting on the right to buy 400,000 shares of the bank’s stock at $53.85, a perk handed out by its board a decade ago.
The problem is, the stock trades at $24.58.
Those stock options expired worthless on Wednesday, a sign of the lingering effects of the financial crisis and the huge gap between banks that have recovered fully from that era and those still far from the targets set during Wall Street’s better times. READ MORE
The spectacle of Google’s self-driving car effort (now known as Waymo) losing so many top employees over the past few years has been hard to figure out (excepting the fact that Apple’s car project seemed to be having even more problems). This is especially the case when one considers that the company’s program had seemingly been making good progress and was/is something of a leader in the field.
The explanation put forward in the recent Bloomberg article seems to do a good job of explaining the situation, though — Google simply put too much money on the table, and utilized a compensation system that was (seemingly) not well thought out. READ MORE
Increasing your company sales, doesn’t just have to be about increasing your sales team and their working hours. A sales incentives scheme can help give your salespeople the right tools, mindset, and work ethic they need to deliver more sales for you. READ MORE
Awarding higher pay and bonuses to top performers seems like the straightforward way to incentivize and retain great employees. The most popular format being performance-based bonuses, which keep base pay manageable and provide incentives for better performance. However, research shows us that this may not be as simple as it seems.
A study by Willis Towers Watson found that only 20% of employers in North America actually believe merit pay is effective in driving high performance. READ MORE
Today, there’s somewhat of a crisis of confidence in the way that industry evaluates employee performance. One piece of recent research showed that only 6% of organizations think their performance management processes are worthwhile.
Many companies have undergone a move away from traditional, metric-based performance assessment in recent years. Sometimes this is because they have been found limiting. Sometimes because it was found that employers and managers are too easily inclined to simply ignore them, if their findings don’t line up with their personal “gut feeling” on who they like or dislike.
The fact is that as the nature of work has changed, the behavior of workforces has shifted to match this. Organizations have become larger and more complex, and smaller operations are more likely to work with networks of partners. The efficiency or inefficiency of a worker in today’s knowledge economy simply is difficult to assess using in traditional, metric-based assessments. READ MORE
Investors buying into Snap Inc.’s much-anticipated initial public offering won’t have any say on how much the company pays its executives.
Snap will not be subject to the say-on-pay provisions of the Dodd-Frank Act, the company said in an updated deal prospectus Thursday. The act was put in place after the 2008 financial crisis to help investors throttle outsized pay packages by requiring advisory votes on pay plans. READ MORE
Wells Fargo & Co. will probably withhold 2016 bonuses for senior leaders including Chief Executive Officer Tim Sloan after the bank’s business and stock were slammed by a bogus-account scandal, according to a person briefed on the talks.
The company’s board discussed the move in late January and is likely to make a decision by the end of this month, potentially eliminating annual incentive awards paid in cash or equity, the person said, asking not to be identified because the talks are confidential. The measure, which also could affect finance chief John Shrewsberry and other top executives, is meant to hold management accountable but doesn’t reflect findings of specific wrongdoing. READ MORE
Last week, the parent of Snapchat took heat for appearing to pay its only female director, Joanna Coles, far less than her male peers on the company’s board.
Now Snap Inc., as the company is formally known, would like to correct the record. In a footnote to an amended regulatory filing on Thursday, Snap clarifies that Ms. Coles’s previously reported compensation left out a new four-year contract that she signed last month, giving her more stock. READ MORE
The tech industry has poured an estimated $1.2 billion into diversity initiatives over the past five years, according to Intel and Dalberg’s 2016 Decoding Diversity study, yet the investment has barely moved the needle. Racial and ethnic minorities today secure only 1% to 2% more available jobs in the industry than they did 15 years ago, according to the same report. There are a wide variety of theories as to why this is the case, ranging from a lack of diversity in executive leadership teams to an exclusionary corporate culture, but the bottom line remains the same.
In fact, the industry known for propelling the world forward continues to lag behind the rest of the American private sector’s workforce when it comes to diversity—by about 16-18 percentage points, according to the Decoding Diversity study—and some are beginning to question whether there’s more that can be done. READ MORE
Meredith Corp. and an investor group led by Edgar Bronfman Jr. have advanced in their pursuit of Time Inc. as the publisher explores a possible sale, according to people familiar with the situation.
Meredith, which publishes such magazines as Family Circle, Shape and Better Homes & Gardens, in recent days signed a nondisclosure agreement with Time Inc. TIME, +0.80% and is expected in coming weeks to get a look at some of the company’s data and meet with its senior management, one of the people said.
The group led by Mr. Bronfman and Len Blavatnik’s Access Industries, whose earlier overtures to Time Inc. were rejected, has also signed a nondisclosure agreement and has already met with senior Time Inc. executives, one of the people said. A follow-up meeting is being scheduled. READ MORE
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A recent change in financial accounting standards has resulted in questions regarding the U.S. income tax withholding rules applicable to equity compensation. As background, in March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation-- Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to simplify accounting for equity grants to employees. Prior to ASU 2016-09, in order to avoid unfavorable liability accounting for equity compensation, net share settlement of an equity award was required to be limited to a number of withheld shares having a value that did not exceed the applicable "minimum statutory withholding" obligations. Under ASU 2016-09, FASB allows favorable financial accounting treatment for equity awards if the number of shares that are withheld pursuant to net share settlement (and the taxes paid in cash) does not exceed a number of shares having a value equal to tax withholding obligations calculated using rates of up to the "maximum statutory tax rates in the applicable jurisdiction." ASU 2016-09 generally is effective for 2017 for calendaryear public companies, although early adoption is permitted. READ MORE
Portland put itself in the international spotlight recently when it adopted the nation’s first “CEO tax,” scheduled to go into effect next year.
The tax requires any company doing business in Portland to pay a 10 percent surcharge on top of the city’s existing 2.2 percent business license tax if its chief executive officer’s compensation is more than 100 times the median pay of all its workers. Companies with CEOs who make 250 times employees’ median pay will pay a 25 percent CEO tax.
As Fortune magazine tartly put it: “Portland, Ore., is on a crusade to solve income inequality, even if only in its mind.” READ MORE
Philadelphia employers will no longer be able to ask job applicants about salary history under an ordinance (Bill No. 160840) that Mayor Jim Kenney signed into law on Jan. 23.
The measure, effective May 23, makes Philadelphia the latest jurisdiction to combat pay discrimination by imposing limitations on the way employers use workers’ salary histories to set compensation. Massachusetts included a ban on salary history queries as part of a sweeping equal pay law that was signed Aug. 1, 2016. Also in 2016, California addressed salary histories in an amendment to its existing equal pay law. READ MORE
As snow turned to slush on a Saturday in late December, 12 strangers gathered at Glamour’s offices to take on a loaded issue: the gender pay gap. For two decades, Glamour’s Salary Survey has looked at what women in various fields earn across the country. But on this, its twentieth anniversary, we wanted to see how women’s pay compares to men’s. Are women really lagging behind?
So we asked 12 gutsy women and men in similar jobs, with similar titles and levels of experience, to come clean about their earnings. It wasn’t easy—most Americans would rather reveal their sex secrets than their salaries. But we found six pairs willing to be brave: two software engineers, two data analysts, two social media managers working in public relations, a duo in sales, a couple of cashiers, and a pair of graphic designers. All the participants wrote their salaries on large cards. Then we asked each pair—on the count of three—to flip their cards over. READ MORE
With student loans reaching an all-time high, it's no surprise that many are now questioning whether their education is worth the expense.
The average 2015 college graduate completed their education with $35,051 in student loan debt, according to a study by Edvisor, and a survey by Salary.com found that 35% of 15,000 respondents believe a degree isn't worth the price tag, with another 43% claiming it isn’t necessary to succeed in life.
While not all degrees are created equal, and you can always find a career in a field you didn’t major in, certain degrees are a better bet for students looking for the highest return on their education investment. In fact, a 2015 report by Georgetown University’s Center on Education and the Workforce estimated that the difference in lifetime wages between the highest- and lowest-paying college majors is about $3.4 million. READ MORE
Audi's Super Bowl LI commercial had a strong message about equal pay.
It featured a little girl competing in a soapbox car race as the girl's father narrates his struggle to discuss gender equality with her.
"What do I tell my daughter?" the father says. "Do I tell her that her grandpa's worth more than her grandma? That her dad is worth more than her mom? Do I tell her that despite her education, her drive, her skills, her intelligence, she will automatically be valued as less than every man she ever meets? Or maybe I'll be able to tell her something different." READ MORE
For many years, the IRS has promised to issue regulations for Sec. 457(f) plans, largely because taxpayers and practitioners sorely needed detailed guidance addressing certain issues. Finally, the IRS issued proposed regulations (REG-147196-07) in June 2016, and they provide helpful guidance and even some welcome news. The regulations are effective for calendar years beginning after the date the IRS publishes final regulations, but taxpayers may rely on the proposed regulations in the interim.
A Sec. 457(f) plan is a deferred compensation plan sponsored by a state or local government or by a tax-exempt entity. The rules regarding Sec. 457(f) plans get a lot of attention because an employee's benefits are subject to income tax upon vesting, even if they are paid later, a situation that usually is viewed as unfavorable. Employers and employees that do not realize they have a Sec. 457(f) plan or do not realize that the amounts have vested and are therefore currently taxable can be in for a shock. Besides taxes on the vested amounts, employees can be subject to interest and penalties for not paying the taxes on time. READ MORE
This drive of the American economy to expand is none more apparent than the 2015 wage statistics culled by the Social Security Administration (SSA) from more than 160 million people in the labor force. If you earned wages in 2015 that required you to pay the FICA tax, or you wound up netting payment from a deferred compensation plan, you're included in the SSA's wage statistics data.
In total, $7.145 trillion in compensation was earned during 2015 and subject to federal income taxes. Another $273.7 billion was also paid out by deferred compensation plans, such as a pension or a retirement plan (e.g., 401(k)). After exclusions, some $7.42 trillion in net compensation was paid to Americans in 2015. READ MORE
Oracle, which requires salespeople to agree to binding arbitration to avoid costly disputes in court, is unhappy that an arbitrator ruled against it. So it is suing one of its own employees, applications account manager Felicia Wilson, in a New York court to undo the arbitrator's $257,335.79 award.
That's the amount Oracle withheld from Wilson's $616,302.31 commission payment for the company's fiscal 2014. It would have been $873,638.10 but for Oracle's insistence that Wilson's Individualized Compensation Plan limits commission sales credits from any single customer in excess of 250 per cent of the salesperson's quota in a given year. READ MORE