The Dangers of Paying Employees Too Much

One of the more challenging compensation conversations I have as a consultant is helping clients understand that offering the highest pay isn't always the best option. There are dangers and downsides to "overpaying" people. It's certainly an unpopular sentiment at the neighborhood BBQ (and likely among many who read this article). READ MORE

New Job? Four Ways To Improve Your Salary Offer

After guiding thousands of clients through the salary negotiation process, I’ve noticed that when most people begin to negotiate a job offer, they focus on the base compensation and ways to improve it. While you may be able to improve the initial offer, you may not be successful getting to your “magic number” without being a bit more creative in how you approach the salary conversation. Compensation is made up of two types: fixed and variable. READ MORE

Partner Compensation and Theology

I compared CPA firms to law firms and asked why law firms publicly share their average equity partner compensation when they report their profitability in publications like The American Lawyer. CPA firms go to great measures to “hide” this information from their associates and potential recruits. It may not be “all about the money,” but the leaders of these great law firms will tell you that this metric gives them a major recruiting advantage when going after top talent. I’m not saying to go out and brag, but at least find a way to really let them know how financially successful a partner can be at your firm.  READ MORE

Think Your Employees' Equity Compensation Isn't Taxable in a Spinoff?

Traditionally, US companies focused their attention on the tax treatment of US shareholders and employees holding equity compensation awards in corporate transactions. However, as more and more transactions contain international components, US companies have been necessarily forced to place greater consideration on the tax implications corporate transactions will have on foreign shareholders and employees holding equity compensation awards.  READ MORE

It’s Time to Tie Executive Compensation to Sustainability

Despite conflicting messages about climate change from U.S. government leaders, sustainability is getting more and more attention at American companies. Shareholders are ratcheting up their demands on environmental and social issues. Consumers are registering their concerns about how companies make their products. And talented Millennial employees are voting with their feet by leaving laggard companies behind. Meanwhile, new technologies are making it easier for sustainability investments to pay off in the middle to long term.  READ MORE

Delaware Bans Compensation History Inquiries

On June 14, 2017, Delaware Governor John Carney signed into law a bill that amends Delaware’s Code relating to unlawful employment practices to prohibit employers from (i) engaging in salary-based screening of prospective employees where prior compensation must satisfy certain minimum or maximum criteria or (ii) seeking the compensation history of a prospective employee from the prospective employee or a current or former employer (the “Law”). Under the Law, “compensation” is defined broadly to include wages, benefits, or other compensation.  READ MORE

Developments in Tax Withholding for Equity Awards under Employer Stock Plans

When an employee exercises or settles an award such as a stock option or restricted stock unit, there is often a measure of value that must be included in the employee’s compensation income. Consequently, employers are required to withhold and remit payroll and income taxes with respect to that compensation, and employers will typically require employees to satisfy their portion of those taxes. Either the employee must come up with other sources of liquidity, or in some cases the taxes may be satisfied by “net settlement” – withholding some of the shares from the award. Two recent developments – one in the accounting arena and the second in securities law – affect how this withholding can be handled.  READ MORE

The Compensation Accounting Tack That Makes PayPal’s Numbers Look So Good

How could stock-based compensation — which is a company expense, after all — have helped PayPal’s performance in the quarter? Simple. The company does not consider stock awards a cost when calculating its favored earnings measure. So when PayPal doles out more stock compensation than it has done historically, all else being equal, its chosen non-GAAP income growth looks better.  READ MORE

U.S. jobs come with paltry pay growth

American jobs and more of them continue to be a crowing point for the White House, as over one million jobs have been created since President Trump took office, as tracked by the Bureau of Labor Statistics. And more are likely on the way thanks to recent deals like the one Wisconsin cut with Apple (AAPL) supplier Foxconn – which alone will create 3,000 jobs.  READ MORE

Balance Due

Structuring executive compensation is a delicate balancing act that isn’t getting easier. Pay plans have multiple goals — attracting and retaining top talent, motivating performance, and keeping activist shareholders at bay — that are often at odds with each other.  READ MORE

Executive Compensation Practical Pointers- CEO Pay Ratio Disclosure

Some state and local governments are attempting to apply new taxes and other charges to publicly traded companies with disclosed pay ratios that exceed certain thresholds. Therefore, companies making such disclosures should consider whether these laws will apply to it and, if so, whether the ratio will exceed the applicable threshold. The company should also involve its tax department to determine any potential tax impact. READ MORE

U.S. orders Wells Fargo to reinstate whistle-blower and pay $577,500 in compensation

The U.S. Labor Department has ordered Wells Fargo & Co. to reinstate another former employee who alleged she was fired after reporting part of the widespread fraud that engulfed the bank in a major scandal.

The whistle-blower, a former branch manager in Pomona, will be reinstated and paid $577,500 in back wages, damages and other compensation, , the agency said, based on an investigation by the department’s Occupational Safety and Health Administration. READ MORE